February 1, 2005
Economic activity in the manufacturing sector grew in January for the 20th consecutive month, while the overall economy grew for the 39th consecutive month, said the nation's supply executives in the latest Manufacturing Institute for Supply Management (ISM) Report on Business®.
The report was issued today by Norbert J. Ore, C.P.M., chair of the ISM Manufacturing Business Survey Committee. "January's PMI [56.4 percent] reflects continuing strength in manufacturing. Production and employment both accelerated during the month. Prices, particularly energy prices, continue to provide a challenge to buyers. However, the rate of increase of prices continues to decelerate, raising hopes that price inflation will moderate as the year advances. Inventory growth was significant in January, while supplier deliveries do not appear to be a problem based on a decelerating index. Additionally, only one commodity [steel] is listed in short supply."
Among the 12 industries that reported growth in January are primary metals; transportation & equipment; and industrial equipment & computers. These industries reported growth in New Orders, Production, and Employment, and along with fabricated metals, showed growth in New Export Orders.
Among the 10 industries that reported higher inventories in January are primary metals; transportation & equipment; and fabricated metals. Fabricated metals also reported higher customer inventories, meaning that their customers do not have sufficient inventories on hand at this time.
ISM's Prices Index (69 percent) indicates manufacturers continued to pay higher prices in January. This is the 35th consecutive month the index has registered higher prices. Fabricated metals; primary metals; industrial & commercial equipment & computers; and transportation & equipment were among the 17 industries that reported paying higher prices.