PMI hits another high note in January
With new orders and production levels at a two-year high, the Institute for Supply Management’s purchasing manufacturers’ index (PMI) jumped another 1.5 percentage points in January to 56%, its highest level since November 2014.
The new orders index rose to 60.4%, the second straight month that index was above 60%. The production index jumped 2.0 percentage points to 61.4%, and with an increase of 3.3 percentage points in the employment index to 56.1%, all signs were pointing up for the manufacturing sector.
"The PMI, new orders, and production indexes all registered their highest levels since November of 2014, and comments from the panel are generally positive regarding demand levels and business conditions," said Bradley Holcomb, chairman of the Institute for Supply Management’s manufacturing business survey committee. Among the comments from committee members were:
- "Demand very steady to start the year." (Chemical Products)
- "January revenue target slightly lower following a big December shipment month." (Computer & Electronic Products)
- "Strong start to the new year. Production is increasing and we are adding capacity." (Plastics & Rubber Products)
- "Business looks stronger moving into the first quarter of 2017." (Primary Metals)
- "Economic outlook remains stable and no current effects of geopolitical changes appear to be penetrating market conditions." (Food, Beverage & Tobacco Products)
- "Sales bookings are exceeding expectations. We are starting to see supply shortages in hot rolled steel due to the curtailment of imports." (Machinery)
- "Year starting on pace with Q4 2016." (Transportation Equipment)
- "Business conditions are good; demand is generally increasing." (Miscellaneous Manufacturing)
- "Conditions and outlook remain positive. Raw material prices are stable resulting in stable margins. Asset utilization remains high." (Petroleum & Coal Products)
- "Steady demand from automotive." (Fabricated Metal Products).
While the PMI has been above the growth level of 50% for 10 of the last 11 months, the January reading of 56% marked the fifth consecutive month of growth, and the fourth straight month growth rate exceeded 1.0 percentage points.
Bob Vavra, content manager, Plant Engineering, CFE Media, email@example.com.