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PMI Shows Return to Growth in January

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Economic activity in the manufacturing sector reversed its five-month trend by expanding in January, reports the Institute for Supply Management in its latest Manufacturing Report on Business. The PMI for January was 50.9 percent, an increase of 3.1 percentage points from the December reading. Any reading above 50 percent represents growth in the manufacturing sector.

Other indices also showed a strong growth trend. The New Orders Index climbed 4.4 percentage points to 52 percent, the Production Index increased 9.5 percentage points to 54.3 percent and the Employment Index of 46.6 percent was up 1.4 percentage points.

Of the 18 manufacturing industries, eight reported growth in January, including fabricated metal products and miscellaneous manufacturing. Primary metals, appliances and components, transportation equipment, and machinery all showed declines.

The PMI of 50.9 percent corresponds to a 2.4 percent increase in real GDP, says Timothy Fiore, chairman of the ISM’s Manufacturing Business Survey Committee.

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