Feb. 5, 2014
Weather Takes a Toll on PMI
Economic activity in the manufacturing sector expanded in January for the eighth consecutive month, but took a hit from the bad weather, reports the Institute for Supply Management, Tempe, Ariz. January’s PMI was just 51.3 percent, a decrease of 5.2 percentage points from December’s reading.
Purchasing managers from 18 manufacturing industries were surveyed, and 11 industries reported growth in January, including fabricated metal products and appliances and components. Miscellaneous manufacturing was among the markets reporting contraction in January.
Among other readings in January, the New Orders Index declined 13.2 percentage points to 51.2 percent and the Production Index dipped 6.9 percent to 45.8 percent. Inventories of raw materials decreased by 3 percentage points to 44 percent, the lowest reading since December 2012.
Any reading above 50 indicates growth. The 51.3 percent PMI for January corresponds to a 2.7 percent increase in real GDP on an annualized basis. Adverse weather conditions in much of the country may have played a role in the decreased numbers in many categories, respondents told ISM.