US manufacturing sees sharp gains in January

01 February 2010 17:13  [Source: ICIS news]

WASHINGTON (ICIS news)--US manufacturing production advanced sharply in January, marking the sixth straight month of improvement and the strongest month-to-month gain in six months, a key industry survey reported on Monday.

The Institute for Supply Management (ISM) said its closely watched purchasing managers index (PMI) rose to 58.4% in January from the 54.9% measure recorded in December, a gain of 3.5 percentage points.

The December PMI of 54.9% showed a gain of just 1.2 percentage points over November, with such small incremental advances typical of the last six months.

The January PMI of 58.4% also is the highest reading since August 2004 when the index was at 58.5%, the institute noted.

“This month’s report provides significant assurance that the manufacturing sector is in recovery,” said Norbert Ore, who heads the institute’s monthly manufacturing industry survey.

The institute surveys purchasing managers and other executives in 18 key manufacturing sectors to gauge their companies’ performance in ten business measures, such as new orders, production levels, employment, order backlogs and inventories.

Ore noted that both the new orders and production measures were above 60% for January, “indicating strong current and future performance for manufacturing”.

He said that 13 of the 18 manufacturing sectors surveyed reported growth in January compared with only nine that showed growth in December.

“This is a good indication that the impact of the recovery is expanding,” Ore said.

The broad US manufacturing industry is a key downstream consuming sector for chemicals, resins and derivative products, so the well-being of the nation’s production industries is an indicator of near-term future prospects for chemical makers.

Among the 13 manufacturing industries reporting growth in January were several that are large-scale consumers of chemicals either in processing or as end-product components, including apparel, textiles, miscellaneous manufacturing, computers, food and beverages and appliances.

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By: Joe Kamalick
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