The overall economy grew for the 75th straight month, while the manufacturing sector returned to expansion after a month of contraction, that followed eleven months of growth, the Institute for Supply Management reported Friday.
According to the ISM’s monthly report on business, the ISM index increased to 50.7 in January from 47.7 in December.
Economists polled by IFR Markets predicted the index would slip to 47.0.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
“The manufacturing sector gained momentum in January as the PMI rose 2.3 percentage points, signaling stronger performance in January when compared to the seasonally adjusted 48.4 percent recorded in December,” said Norbert J. Ore, chair of the Institute of Supply Management’s manufacturing business survey committee. “This represents a return to the recent trend of slow growth in manufacturing, as the PMI has averaged 50.2 for the past six months.”
The closely watched prices paid index climbed to 76.0 from 68.0. The employment index was at 47.1, down from 48.7 in the prior month.
The production index increased to 55.2 from 48.6, the new orders index gained to 49.5 from 46.9; the supplier deliveries index increased to 52.8 from 52.6; the export orders index rose to 58.5 from 52.5; and the imports index rose to 52.5 from 48.0.
The inventories index increased to 49.1 from 45.4; the customers’ inventories index slid to 49.5 from 51.5; and backlog of orders increased to 44.0 from 43.0.