United States: Manufacturing falls to lowest level since May 2013
February 3, 2014
In January, the ISM manufacturing index fell to 51.3%, marking a deterioration over the 56.5% recorded in December. The result exceeded market expectations of a fall to 56.0%. This is the second month in a row in which the index has fallen and it now sits at the lowest level in eight months, although it is still just above the 50.0% threshold that indicates expansion in the manufacturing sector. Many analysts pointed to the drastically cold weather as having a temporary impact, while others are more concerned that the momentum that was seen in 2013 is fading.
Four of the five ISM indicators registered losses over the previous month. New orders dropped significantly, falling from 64.4% in December to 51.2% in January, which does not bode well for future production. Production, employment, and inventories also decreased. Supplier deliveries rose negligibly.
FocusEconomics Consensus Forecast panelists project that industrial output will increase 3.9% this year, which is up 0.4 percentage points from last month's forecast. For 2015, panelists see industrial production accelerating to a 4.1% expansion.
Author: Carl Kelly, Economist