The ISM Manufacturing PMI in the US jumped to 56.6 in January of 2019 from an upwardly revised 54.3 in December, easily beating market expectations of 54.2. Faster increases were seen in new orders, production and inventories while employment slowed slightly. On the other hand, exports continued to expand, but at the lowest level since the fourth quarter of 2016 and 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.
Faster increases were seen in new orders (58.2 from 51.3 in December), production (60.5 from 54.1), inventories (52.8 from 51.2) and backlogs of orders (50.3 from 50). On the other hand, slowdowns were seen in employment (55.5 from 56), supplier deliveries (56.2 from 59) and new export orders (51.8 from 52.8). Also, prices fell (49.6 from 54.9) and customers’ inventories were too low (42.8 from 41.7).
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 is Nonmetallic Mineral Products.
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