Economy: ISM Manufacturing Index for January 2020

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for January 2020:

Predicted: 48.7%

Actual: 50.9% (+3.1 points month-on-month change)

=========

Previous month: 47.8%

=========

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 made-in-the-USA sector contracted.

=========

From Today's Report:

"...Economic activity in the manufacturing sector grew in January, and the overall economy grew for the 129th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®..."

=========

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

“Business has picked up considerably. Many of our suppliers are working at or above full capacity. Tariffs are still a concern and are believed to be a factor in short supply and higher prices of electronic parts. Our profit margin has been somewhat negatively affected by high tariffs, particularly on electronic parts from China.”
(Computer + Electronic Products)

“Small signs of increased global demand in the chemical segment.”
(Chemical Products)

“Continued signs of slowdown in manufacturing.”
(Transportation Equipment)

“Demand for prepared frozen food continues to be strong, but margins compressing as inputs rise with price elasticity preventing accompanying increases.”
(Food, Beverage + Tobacco Products)

“Our customer slowdown has not reached the bottom.”
(Petroleum + Coal Products)

“Our business is starting 2020 stronger than we finished 2019, as we saw a dramatic downturn in orders over the last four months of 2019. Orders are up to start the year, but slightly behind where they were one year ago.”
(Fabricated Metal Products)

“Business is good — above last year, though a little below plan.”
(Furniture + Related Products)

“The annual holiday slowdown was slightly more significant compared to the previous three years, heightening concerns over the 2020 first-quarter forecast.”
(Electrical Equipment, Appliances + Components)

“The lack of faith in the economy seems to be why we cannot sell capital projects.”
(Machinery)

“Tariffs on injection molds will impact selection of mold builder for future jobs. We are more likely to choose domestic rather than offshore.”
(Plastics + Rubber Products)

=========