A report from
the Institute for Supply Management (ISM) showed on Thursday the U.S.
manufacturing sector’s activity continued to contract in January 2024, albeit at a weaker pace than in the previous 14 months.
The ISM's index
of manufacturing activity - the manufacturing PMI - checked in at 49.1 per cent
in January 2024, up 2.0 percentage points from a downwardly revised December 2023
reading of 47.1 per cent (from 47.4). The January print pointed to the contraction
in the U.S. manufacturing sector for the 15th straight month, albeit at the softest
pace in this sequence.
Economists had predicted
the indicator to slip to 47.0 per cent.
According to the report, the New Orders Index surged
5.5 percentage points to 52.5 per cent last month, returning to expansion
territory after staying 16 months in contraction. The Production Index increased
0.5 percentage point to 50.4 per cent. Meanwhile, the Employment
Index decreased 0.4 percentage point to 47.1 per cent, evincing employment
contracted for the fourth month in a row. Elsewhere, the Supplier Deliveries Index climbed 2.1 percentage points to 49.1 per
cent, indicating that delivery performance of suppliers to manufacturing organizations
improved for the 16th straight month in January (the indicator is inversed; a
reading of above 50 per cent indicates slower deliveries). At the same time, the
Inventories Index jumped 2.1 percentage points to 46.2 per cent, suggesting
manufacturing inventories decreased at a slower rate compared to December. On the price front, the Prices Index soared 7.7
percentage points to 52.9 per cent, indicating raw materials prices rose after
eight consecutive months of declines.,