NEW YORK – The overall economy grew for the thirty-second straight time, while the manufacturing sector expanded for the thirtieth time, the Institute for Supply Management reported Wednesday.
According to the ISM’s monthly report on business, the ISM index climbed to 54.1 in January from 53.1 in December.
Economists polled by Thomson Reuters predicted the index would climb to 54.5.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
“The PMI registered 54.1 percent, an increase of 1 percentage point from December’s seasonally adjusted reading of 53.1 percent, indicating expansion in the manufacturing sector for the 30th consecutive month," said Bradley Holcomb, chair of the Institute of Supply Management's manufacturing business survey committee. “New Orders Index increased 2.8 percentage points from December’s seasonally adjusted reading to 57.6 percent, reflecting the 33rd consecutive month of growth in new orders. Prices of raw materials increased for the first time in the last four months. Manufacturing is starting out the year on a positive note, with new orders, production and employment all growing in January.”
The closely watched prices paid index jumped to 55.5 from 47.5. The employment index was at 54.3, down from 54.8 the prior month.
The production index decreased to 55.7 from 58.9, the new orders index grew to 57.6 from 54.8; the supplier deliveries index gained to 53.6 from 51.5; the export orders index increased to 55.0 from 53.0; and the imports index fell to 52.5 from 54.0.
The inventories index rose to 49.5 from 45.5; the customers’ inventories index grew to 47.5 from 42.5; and backlog of orders climbed to 52.5 from 48.0.
Respondents’ comments included:
“Still seeing raw materials pricing moving down in general, but expect inflation later in the quarter.” (Chemical Products)
“Year starting a little slow, but customers are positive about increased business in 2012.” (Machinery)
“Once again, business continues to be strong.” (Paper Products)
“Pricing remains in check with the demand we are seeing. Supplier deliveries are on time or early.” (Food, Beverage & Tobacco Products)
“The economy seems to be slowly improving.” (Fabricated Metal Products)
“Business lost to offshore is coming back.” (Computer & Electronic Products)
“Business remains strong. Order intake is great — more than 20 percent above budget.” (Primary Metals)
“Indications are that 2012 business environment will improve over 2011.” (Transportation Equipment)
“Market conditions appear to be improving, with the outlook for 2012 better yet.” (Wood Products)