ISM reported that the January Manufacturing PMI was 47.4%, 1 percentage point lower than the recorded 48.7% in December. As any number below 50% represents contraction, this is the second month the manufacturing sector has contracted following a 30-month period of expansion.
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Here is the breakdown of the January PMI:
- New Orders Index: 42.5%, a 2.6 percentage point decrease month-over-month
- Production Index: 48%, a 0.6 percentage point decrease month-over-month
- Prices Index: 44.5%, a 5.1 percentage point increase month-over-month
- Backlog of Orders Index: 43.4%, a 2 percentage point increase month-over-month
- Employment Index: 50.6%, a 0.2 percentage point decrease month-over-month
- Supplier Deliveries Index: 45.6%, a 0.5 percentage point increase month-over-month
- Inventories Index: 50.2%, a 2.1 percentage point decrease month-over-month
- New Export Orders Index: 49.4%, a 3.2 percentage point increase month-over-month
- Imports Index: 47.8%, a 2.7 percentage point increase month-over-month
“The U.S. manufacturing sector again contracted, with the Manufacturing PMI at its lowest level since the coronavirus pandemic recovery began. With Business Survey Committee panelists reporting softening new order rates over the previous nine months, the January composite index reading reflects companies slowing outputs to better match demand in the first half of 2023 and prepare for growth in the second half of the year,” Timothy R. Fiore, ISM Chairman, said.
Of the six biggest manufacturing industries, only Transportation Equipment saw growth in January.