A key indicator of manufacturing activity in January reached its highest level since August 2004. The Institute of Supply Management’s PMI rose for the sixth straight month in January to 58.4 percent, 3.5 percentage points above the December level. A PMI above 50 percent means the manufacturing sector is expanding.
“This month’s report provides significant assurance that the manufacturing sector is in recovery,” said Norbert Ore, chair of ISM’s Manufacturing Business Survey Committee. “Both the New Orders and Production Indexes are above 60 percent, indicating strong current and future performance for manufacturing.”
In January, 13 of 18 industries reported growth, up from nine industries last month. “This is a good indication that the impact of the recovery is expanding,” Ore said. Another positive indicator for the future identified by the ISM survey is that inventories are continuing to shrink — as they have done for 45 consecutive months — and that customers’ inventories remain too low.