U.S. manufacturing activity contracted for the fourth straight month in January, according to a report released by the Institute for Supply Management, although the index of activity in the sector did show a slight increase.
The ISM said its purchasing managers index inched up to 48.2 in January from a downwardly revised 48.0 in December, but a reading below 50 continues to indicate a contraction in manufacturing activity.
Economists had expected the index to climb to a reading of 48.3 from the 48.2 originally reported for the previous month.
The modest increase by the headline index reflected a turnaround in new orders, as the new orders index rose to 51.5 in January from 48.8 in December.
The report also showed a rebound in production, with the production index creeping up to 50.2 in January from 49.9 in December.
On the other hand, the ISM said employment in the manufacturing sector contracted at a faster rate, as the employment index dropped to 45.9 in January from 48.0 in December.
The prices index was unchanged from the previous month at 33.5 in January, indicating lower raw materials prices for the fifteenth consecutive month.
Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee, said, “Comments from the panel indicate a mix ranging from strong to soft orders, as eight of our 18 industries report an increase in orders, and seven industries report a decrease in orders.”
On Wednesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of January. The index of activity in the sector is expected to tick up to 55.5 from 55.3 in December.
The material has been provided by InstaForex Company – www.instaforex.com