Economy: ISM Manufacturing Index for January 2016

Monday, February 01, 2016

ISM Manufacturing Index for January 2016

Earlier today, the Institute for Supply Management (ISM) released their Purchasing Manager's Index (PMI) for January 2016:

Predicted: 48.3%
Actual: 48.2%

Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the factory sector contracted.

Last month, the PMI was 48.0% (revised.)

The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

"The oil and gas sector continues to be challenged by low oil and gas prices. Risk of suppliers filing for bankruptcy and reducing their workforce is becoming an increasing risk. Our company workforce is also declining."
(Petroleum and Coal Products)

"Business this month [is] better than last month and better than this period last year. Reduced oil and basic chemical prices providing favorable margin comparisons."
(Chemical Products)

"Huge rollout in wireless in 2016 across all markets. We should be very, very busy."
(Computer and Electronic Products)

"We are a bit slower, but staying busy."
(Fabricated Metal Products)

"Business is still strong, but slowing."
(Transportation Equipment)

"2016 starting off with strong orders."
(Primary Metals)

"Market is sluggish to start the year."
(Wood Products)

"Medical device continues to be strong."
(Miscellaneous Manufacturing)

"Much worldwide macroeconomic uncertainty affecting our business. Business confidence seems low."
(Food, Beverage and Tobacco Products)

"Overall demand is higher than expected for post-holiday season."
(Plastics and Rubber Products)