The U.S. manufacturing sector showed signs of resurgence in January, buoyed by a significant increase in new orders, potentially marking the end of a prolonged contraction phase.
Data published Thursday highlighted an upward revision in the final reading of the S&P Global US Manufacturing PMI and a better-than-expected release for the ISM Manufacturing PMI.
Both assessments of manufacturing activity indicate a robust rebound in new orders. They also emphasize the rising costs of raw materials and highlight the need for close monitoring of recent disruptions in international trade.
| Index | January 2024 | December 2023 | Notes |
|---|---|---|---|
| S&P Global Manufacturing PMI | 50.7 | 47.4 | Upwardly revised from 50.3, highest print since September 2022, first expansion since April 2023 |
| ISM Manufacturing PMI | 49.1 | 47.1 | Tops the expected 47. New orders climb, price pressures surge |
US Manufacturing Sector Recovers In January: Key Takeaways
The S&P Global US Manufacturing PMI was revised upwards from a preliminary estimate of 50.3 to 50.7 in January 2024, up from 47.4 in December.
This adjustment suggests a more significant improvement in manufacturing conditions than initially anticipated, marking the largest reading since September 2022 and the first sign of expansionary conditions since April 2023.
The primary driver behind the increase in the headline figure was a renewed expansion in new orders at manufacturing firms at the year’s beginning.
In January, confidence among goods producers soared to its highest level in 21 months, driven by marketing expenditures and capacity expansion, coupled with expectations of improved demand conditions.
Concurrently, the Institute for Supply Management (ISM) reported that its Manufacturing PMI reached 49.1 in January, up from 47.1 in December and considerably above the forecasted 47. Despite this improvement, the reading remained below 50, indicating the 15th consecutive month of contraction.
The ISM New Orders Index entered expansion territory at 52.5% , a significant rise of 5.5 percentage points from the seasonally adjusted figure of 47% noted in December.
The ISM Prices Index was recorded at 52.9%, up 7.7 percentage points from the December figure of 45.2%. This increase suggests that the prices of raw materials have risen in January after eight consecutive months of…
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