Manufacturing sector rebounds in January

ISM's manufacturing index registered 50.7% last month, up 2.3 points from December's disappointing numbers.

By Staff -- Modern Materials Handling, 2/1/2008

Economic activity in the manufacturing sector expanded in January, according to a report released today by the Institute for Supply Management (ISM).

The institute’s manufacturing index—known as the PMI—registered 50.7% for January. (A PMI of more than 50 represents expansion of the manufacturing sector, while a reading under 50 represents a contraction.) PMI registered 47.7% in December, making it the first month the manufacturing sector failed to grow since January 2007.

This January’s results, says ISM’s Norbert Ore, represent “a return to the recent trend of slow growth in manufacturing, as the PMI has averaged 50.2 percent for the past six months.”

January’s top performing industries were apparel and allied products; petroleum and coal products; and food, beverage and tobacco products.

According to the report, the current turmoil in financial markets is not harming manufacturers’ borrowing plans. Nearly 93% of respondents to a special question on ISM’s January survey said the turmoil is not affecting their company’s ability to obtain financing.

The survey’s other special question for January asked about manufacturer’s outlook for the next 12 months. The results:

• Better, 22.9%
• Same, 37.5%
• Worse, 39.6%