Monday, February 2, 2015

ISM Manufacturing Index Expanding More Slowly

The ISM manufacturing index dipped 1.6 percentage points to 53.5 in January, the lowest reading in the past year. Index readings above 50 indicate expansion in the manufacturing economy. As of January, the index has been expanding for 20 consecutive months, although the pace has declined. Of the 18 manufacturing industries indexed, 14 reported growth in January.

The New Orders Index declined 4.9 points to 52.9, but the Inventory Index increased 5.5 point to 51.0. The gap between New Orders and Inventories—a proxy for future production—narrowed 10.4 points to 1.9 points.

The Employment Index decreased 1.9 points to 54.1. This is the 19th consecutive quarter of growth in employment. Nine of the 18 manufacturing industries indexed reported growth in employment. Four industries reported a decrease: Nonmetallic Mineral Products; Computer & Electronic Products; Transportation Equipment; and Machinery.

Exports declined 2.5 points to 49.5, contracting after growing for 25 consecutive months. Imports increased 0.5 points to 55.5.

Prices dropped 3.5 percentage points to 35.0. This is the third month in a row that the index is reporting a decrease in the price of raw materials.

Read the ISM release.

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