U.S. PMI, NEW ORDERS JUMP

The ISM PMI jumped to 53.1 from 50.2, well above the 50.7 estimates, the biggest beat in 16 months.

The PMI™ registered 53.1 percent, an increase of 2.9 percentage points from December’s seasonally adjusted reading of 50.2 percent, indicating expansion in manufacturing for the second consecutive month. The New Orders Index registered 53.3 percent, an increase of 3.6 percent over December’s seasonally adjusted reading of 49.7 percent, indicating growth in new orders. Manufacturing is starting out the year on a positive note, with all five of the PMI™’s component indexes — new orders, production, employment, supplier deliveries and inventories — registering above 50 percent in January.”

Of the 18 manufacturing industries, 13 are reporting growth in January in the following order: Plastics & Rubber Products; Textile Mills; Furniture & Related Products; Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Fabricated Metal Products; Transportation Equipment; Petroleum & Coal Products; Machinery; Primary Metals; and Food, Beverage & Tobacco Products. The four industries reporting contraction in January are: Nonmetallic Mineral Products; Computer & Electronic Products; Wood Products; and Chemical Products.

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New export orders slipped 1.0 to 50.5 and backlogs declined 1.0 to 47.5. The Markit PMI (below) confirms the relative weakening in export orders. The U.S. economy is perking up but gets little outside help.

The final Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) signalled a strong expansion of the U.S. manufacturing sector at the start of 2013. Moreover, at 55.8, below the earlier flash estimate of 56.1 but higher than that recorded in December (54.0), the PMI signalled the fastest rate of growth in nine months.

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Manufacturers received a larger volume of new orders in January, with the rate of growth strong and the fastest since May 2010. Panellists commented on improving market conditions and new product launches.

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The rise in total new work largely reflected a stronger increase in domestic orders. Nonetheless, new export orders rose for the third month running in January, albeit at a weaker rate than in December.
Manufacturing output also rose strongly in January, with the rate of growth quickening to a ten-month high, albeit at a slower pace than indicated by flash data. Higher production largely reflected greater new order requirements, although some firms also commented on new product developments. Concurrently, backlogs of work increased for the third consecutive month.

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Employment in the manufacturing sector rose at the fastest rate in nine months during January. Moreover, job creation was reported in all three market groups, with the strongest increase recorded by producers of consumer goods. (…)

Large manufacturers (more than 500 employees) reported a faster rate of output growth than small and medium-sized firms in January. The strong rise in production partly reflected the sharpest increase in new orders since last April and a further rise in exports.

In contrast only a marginal gain in output was recorded by small manufacturers (those that have less than 100 employees), which contributed to the slowest rate of job creation in three months.

 
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