U.S. Manufacturing Production Remains Stable

Manufacturing expanded in January and the general U.S. economy grew for the 117th consecutive month, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business. The January PMI registered at 56.6 percent, a 2.3 percent increase from the December reading of 54.3 percent.

The Report On Business measures its data using the Purchasing Manager’s Index (PMI), which is an indicator of economic health in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding, while below 50 percent indicates that it is generally contracting.

“Comments from the panel reflect continued expanding business strength, supported by strong demand and output,” said Timothy R. Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. “Demand expansion improved with the New Orders Index reading returning to the high 50s, the Customers’ Inventories Index remaining too low, and the Backlog of Orders remaining at a near-zero-expansion level. Consumption continued to strengthen, with production expanding strongly and employment continuing to expand at previous-month levels. Inputs – expressed as supplier deliveries, inventories and imports – continued to improve, but are negative to PMI expansion. Inputs reflect an easing business environment, confirmed by Prices Index contraction.

“Exports continue to expand, but at the lowest level since the fourth quarter of 2016,” Fiore added. “Prices contracted for the first time since the first quarter of 2016. The manufacturing sector continues to expand, reversing December’s weak expansion, but inputs and prices indicate fundamental changes in supply chain constraints.”

Of the 18 manufacturing industries, 14 reported growth in January, in the following order: textile mills; computer & electronic products; plastics & rubber products; miscellaneous manufacturing; furniture & related products; printing & related support activities; primary metals; chemical products; transportation equipment; machinery; fabricated metal products; petroleum & coal products; food, beverage & tobacco products; and electrical equipment, appliances & components.

The only industry reporting contraction in January was nonmetallic mineral products.

Commodities Up in Price

Electronic components; freight; nylon polymer; printed circuit board assemblies; printed circuit boards; steel; hot rolled steel; stainless steel; steel products; sulfuric acid; and valves.

Commodities Down in Price

Aluminum; base oils; caustic soda; copper; diesel; gasoline; memory; polyethylene; polypropylene; steel; carbon steel; hot rolled steel; stainless steel; steel products; and steel scrap.

Commodities in Short Supply

Capacitors; electrical components; electronic components; integrated circuits; nylon polymer; and resistors.

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