January 2017 Manufacturing ISM Report On Business Indicates 5 Month Growth for Manufacturing, New Orders, and Production

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector expanded in January, and the overall economy grew for the 92nd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in January as the PMI registered 56 percent, an increase of 1.5 percentage points from the seasonally adjusted December reading of 54.5 percent, indicating growth in manufacturing for the fifth consecutive month.

ISM’s New Orders Index registered 60.4 percent in January, which is an increase of 0.1 percentage point when compared to the seasonally adjusted 60.3 percent reported for December, indicating growth in new orders for the fifth consecutive month.

ISM’s Production Index registered 61.4 percent in January, which is an increase of 2 percentage points when compared to the seasonally adjusted 59.4 percent reported for December, indicating growth in production for the fifth consecutive month.

ISM’s Employment Index registered 56.1 percent in January, an increase of 3.3 percentage points when compared to the seasonally adjusted December reading of 52.8 percent, indicating growth in employment in January for the fourth consecutive month.

The delivery performance of suppliers to manufacturing organizations was slower in January as the Supplier Deliveries Index registered 53.6 percent, which is 0.6 percentage point higher than the seasonally adjusted 53 percent reported for December.

The Inventories Index registered 48.5 percent in January, which is an increase of 1.5 percentage points when compared to the 47 percent reported for December, indicating raw materials inventories are contracting in January for the 19th consecutive month.

ISM’s Backlog of Orders Index registered 49.5 percent in January, an increase of 0.5 percentage point from the 49 percent reported for December, indicating contraction in order backlogs for the seventh consecutive month.  Of the 89 percent of respondents who reported their backlog of orders, 21 percent reported greater backlogs, 22 percent reported smaller backlogs, and 57 percent reported no change from December.

Of the 18 manufacturing industries, 12 reported growth in January in the following order: Plastics & Rubber Products; Miscellaneous Manufacturing; Apparel, Leather & Allied Products; Paper Products; Chemical Products; Transportation Equipment; Food, Beverage & Tobacco Products; Machinery; Petroleum & Coal Products; Primary Metals; Fabricated Metal Products; and Computer & Electronic Products.  The five industries reporting contraction in January are: Nonmetallic Mineral Products; Wood Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; and Printing & Related Support Activities.

Keywords: Automation, Manufacturing, Process Industries, Discrete Industries, Supply Management, PMI, ISM, ARC Advisory Group.