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Expansion of U.S. Manufacturing Activity Eases in January — ISM

By Xavier Fontdegloria


Manufacturing activity in the U.S. remained resilient at the start of 2021, albeit the expansion pace of the sector eased compared with that of the previous month, data from a survey compiled by the Institute for Supply Management showed Monday.

The ISM Manufacturing Report on Business PMI was 58.7 in January, down from a revised 60.5 in December. The reading misses expectations from economists polled by The Wall Street Journal, who predicted the index to decline slightly to 60.0.

The index continued to indicate strong sector expansion in January, ISM said, with all five subindexes in growth territory but at lower rates compared with December.

"Survey committee members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are continuing to cause strains that limit manufacturing growth potential," said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.

ISM compiles the PMI from a survey of manufacturing supply executives whose responses reflect the change in the current month compared with the previous one in certain areas of business activity. A PMI reading above 50 indicates that the manufacturing economy is generally expanding, while below 50 indicates that it is generally declining. January posts the eighth consecutive month signaling expansion of manufacturing activity.

The production index eased to 60.7 points, a decrease of four points compared with December, while the new orders index remained at a high 61.1 points, but also decreased from 67.5 the prior month.

The employment index stood at 52.6 points, up 0.9 point from December's 51.7 reading.

The inventories index came in at 50.8, almost unchanged from December, and the prices index continued its upward trend and reached 82.1.

Five of the six biggest industry sectors expanded in January compared with the previous month, the report said. Of the 18 manufacturing industries, 16 reported growth.

The manufacturing PMI data for January also signaled that the U.S. overall economic activity is rebuilding, as a reading above 42.8 over a period of time generally indicates an expansion of the overall economy. This is the eighth consecutive month in which the PMI indicates such expansion.


Write to Xavier Fontdegloria at


(END) Dow Jones Newswires

February 01, 2021 10:35 ET (15:35 GMT)

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