US manufacturing was up one per cent from December, according to the monthly ISM Report on Business. The index rose to 54.1 per cent, the fastest gain since June. Any number over 50 indicates expansion.
Bradley J. Holcomb, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee, said the number indicated expansion in manufacturing for the 30th consecutive month.
“The New Orders Index increased 2.8 percentage points from December’s seasonally adjusted reading to 57.6 percent, reflecting the 33rd consecutive month of growth in new orders,” said Holcomb in a statement. “Prices of raw materials increased for the first time in the last four months. Manufacturing is starting out the year on a positive note, with new orders, production and employment all growing in January.”
Transportation Equipment, which includes recreational boats, was one of nine manufacturing industries that reported growth in January. New Orders and Backlogs were also up, signaling continuing strength in the coming months.
“Manufacturing is doing fairly well,” Stuart Hoffman, chief economist at PNC Financial Services Group Inc., told Bloomberg.com. “Autos will definitely be a part of the story. The U.S. will still be exporting to other parts of the world while Europe is in a recession.”
Recent reports from China also said that manufacturing improved there in January, despite weaker exports to Europe. The country's official purchasing manager’s index increased to 50.5 to 50.3 in December.
US manufacturing accounts for about 12 per cent of the US economy. It has been at the forefront of the slow recovery that started in June 2009.
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