Economy

ISM PMI Falls in January But Still in Growth Range

February 4, 2014

The Institute for Supply Management Purchasing Manufacturers Index (PMI) registered 51.3 percent in January. Although the index slid 5.2 percentage points from December, it is still an indicator of growth in the manufacturing sector.

Most of the indices that make up the PMI fell in January. The new orders index took a significant dive of 13.2 percent to register at 51.2 percent, indicating an eighth month of growth but at a much slower rate. Production, that has been in the growth range for 17 months, also slowed, dropping 6.9 percent to a reading of 54.8.

Employment levels eased downward 3.5 percent to register at 52.3 percent from 55.8 in December.

Prices are increasing faster as reflected by a 7 percent increase to 60.5 percent in January.

Exports and imports continue to grow, but slowed by 0.5 percent and 1.5 percent, respectively. Fabricated metals, machinery, and transportation equipment industries reported growth in both new export orders and in imports. The appliance industry reported growth in imports during January.

Purchasers indicated that inventories are contracting for the second consecutive month. The Inventories index registered 44 percent, 3 percent below December’s reading.

Comments by respondents include the following:

“Poor weather impacted outbound and inbound shipments.” (Fabricated Metal Products)
“U.S. government aerospace business is very brisk.” (Transportation Equipment)
“We continue to be busy, working six days, 24 hours a day.” (Primary Metals)
“Restricted optimism heading into Q1.” (Machinery)

SMU Note: You can view the interactive graphic below when you are logged into the website and reading the newsletter online. If you have not logged into the website in the past and need a new user name and password we can do that for you out of our office. Contact us at: info@SteelMarketUpdate.com or by calling 800-432-3475. If you need help navigating the website we would also be very happy to assist you.

{amchart id=”116″ ISM Manufacturing Report on Business PMI History}