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      Manufacturing PMI® at 49.1%; January 2024 Manufacturing ISM® Report On Business®

      Institute for Supply Management logo. (PRNewsFoto/Institute for Supply Management) (PRNewsfoto/Institute for Supply Management)

      News provided by

      Institute for Supply Management

      Feb 01, 2024, 10:00 ET

      Share this article

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      New Orders Growing; Backlogs Contracting; Production Growing; Employment Contracting; Supplier Deliveries Faster; Raw Materials Inventories Contracting; Customers' Inventories Too Low; Prices Increasing; Exports Contracting and Imports Growing

      This report reflects the recently completed annual adjustments to the seasonal factors used to calculate the indexes.

      TEMPE, Ariz., Feb. 1, 2024 /PRNewswire/ -- Economic activity in the manufacturing sector contracted in January for the 15th consecutive month following one month of "unchanged" status (a PMI® reading of 50 percent) and 28 months of growth prior to that, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

      The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

      "The Manufacturing PMI® registered 49.1 percent in January, up 2 percentage points from the seasonally adjusted 47.1 percent recorded in December. The overall economy continued in expansion for the 45th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index moved into expansion territory at 52.5 percent, 5.5 percentage points higher than the seasonally adjusted figure of 47 percent recorded in December. The January reading of the Production Index (50.4 percent) is 0.5 percentage point higher than December's seasonally adjusted figure of 49.9 percent. The Prices Index registered 52.9 percent, up 7.7 percentage points compared to the reading of 45.2 percent in December. The Backlog of Orders Index registered 44.7 percent, 0.6 percentage point lower than the 45.3 percent recorded in December. The Employment Index registered 47.1 percent, down 0.4 percentage point from December's seasonally adjusted figure of 47.5 percent.

      "The Supplier Deliveries Index figure of 49.1 percent is 2.1 percentage points higher than the 47 percent recorded in December. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

      "The Inventories Index increased 2.3 percentage points to 46.2 percent from December's seasonally adjusted reading of 43.9 percent. The New Export Orders Index reading of 45.2 percent is 4.7 percentage points lower than December's figure of 49.9 percent. The Imports Index moved into expansion territory, registering 50.1 percent, 3.7 percentage points higher than the 46.4 percent reported in December."

      Fiore continues, "The U.S. manufacturing sector continued to contract, though at a marginal rate compared to December. Demand improved, output remained stable and inputs are accommodative. Demand moderated, with the (1) New Orders Index expanding at a respectable rate, (2) New Export Orders Index in a headwind and (3) Backlog of Orders Index remaining above 40 percent but still in fairly strong contraction territory at 44.7 percent. Also, the Customers' Inventories Index contracted further, becoming more accommodative for future production. On balance, Output (measured by the Production and Employment indexes) expanded slightly, with a combined 0.1-percentage point upward impact on the Manufacturing PMI® calculation. Panelists' companies maintained production levels month over month and continued head count reductions in January, with significant layoff activity. Inputs — defined as supplier deliveries, inventories, prices and imports — continued to accommodate future demand growth but are showing signs of stiffening. The Supplier Deliveries Index indicated faster deliveries for the 16th straight month, and the Inventories Index moved upward while remaining in moderate contraction territory. The Prices Index climbed into expansion (or 'increasing') territory as new pricing levels for 2024 went into effect.

      "Two of the six biggest manufacturing industries (Transportation Equipment; and Chemical Products) registered growth in January.

      "Demand remains soft but shows signs of improvement, and production execution is stable compared to December, as panelists' companies continue to manage outputs, material inputs and labor costs. Suppliers continue to have capacity. Sixty-two percent of manufacturing gross domestic product (GDP) contracted in January, down from 84 percent in December. More importantly, the share of sector GDP registering a composite PMI® calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 27 percent in January, compared to 48 percent in December, and 54 percent in November. Among the top six industries by contribution to manufacturing GDP in January, two (Machinery; and Computer & Electronic Products) had a PMI® at or below 45 percent, one fewer than in the previous month," says Fiore.

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

      WHAT RESPONDENTS ARE SAYING

      • "The start of 2024 looks good. Sales are above expectations, and costs are mostly stable. A few commodities are up in cost due to supply shortages. Many previously short commodities market positions have corrected themselves. There is a real short-term increase in the cost of international freight." [Chemical Products]
      • "The commercial vehicle market appears to be retracting a bit in 2024 compared to last year. Forecast sales have decreased slightly in most product segments, with only limited growth related to customers' competitive sourcing and moves to new technology. Most supply chains, including for semiconductors, have stabilized, with the only major escalation now being transit through the Red Sea." [Transportation Equipment]
      • "Business continues to stabilize. Cash flow will be tight in 2024." [Food, Beverage & Tobacco Products]
      • "U.S. economic outlook is affecting customer orders, and the current backlog is quite low compared to past quarters. Waiting on potential improvements from the CHIPS and Science Act." [Computer & Electronic Products]
      • "December sales were very strong but slower for the first part of January, as was expected. We expect to see steady sales going forward, if the (U.S. Federal Reserve) continues to hold rates and suggests a rate cut in the future." [Machinery]
      • "Good start to the year. We had budgeted a 3.5-percent increase over 2023. We expect it to be a challenging year. Currently, orders are positive in our automotive OEM and automotive aftermarket business. Our industrial business sector is looking weak at the moment. Still expect to achieve budget forecasts through the first quarter. (We) feel January is running high for automotive because at the end of December, many OEMs cancelled the last few weeks of orders to reduce inventory levels." [Fabricated Metal Products]
      • "Order backlog, which was at historically high levels, is diminishing due to supply chain improvements and slight slowdown of orders." [Miscellaneous Manufacturing]
      • "Demand continues to be slow. Reduction from the second half of 2023 has continued into this year. We are adjusting production to match demand." [Electrical Equipment, Appliances & Components]
      • "Current industry conditions are positive; however, a note of caution as we see potential headwinds with downward price movements in the coming months." [Primary Metals]
      • "Remarkable slowdown in business in December. January has picked up, but not to previous-year levels." [Textile Mills]

      MANUFACTURING AT A GLANCE
      January 2024

      Index

      Series
      Index

      Jan

      Series
      Index

      Dec

      Percentage

      Point

      Change

      Direction

      Rate of
      Change

      Trend*
      (Months)

      Manufacturing PMI®

      49.1

      47.1

      +2.0

      Contracting

      Slower

      15

      New Orders

      52.5

      47.0

      +5.5

      Growing

      From
      Contracting

      1

      Production

      50.4

      49.9

      +0.5

      Growing

      From
      Contracting

      1

      Employment

      47.1

      47.5

      -0.4

      Contracting

      Faster

      4

      Supplier Deliveries

      49.1

      47.0

      +2.1

      Faster

      Slower

      16

      Inventories

      46.2

      43.9

      +2.3

      Contracting

      Slower

      12

      Customers' Inventories

      43.7

      48.1

      -4.4

      Too Low

      Faster

      2

      Prices

      52.9

      45.2

      +7.7

      Increasing

      From
      Decreasing

      1

      Backlog of Orders

      44.7

      45.3

      -0.6

      Contracting

      Faster

      16

      New Export Orders

      45.2

      49.9

      -4.7

      Contracting

      Faster

      8

      Imports

      50.1

      46.4

      +3.7

      Growing

      From
      Contracting

      1

      OVERALL ECONOMY

      Growing

      Faster

      45

      Manufacturing Sector

      Contracting

      Slower

      15

      Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.
      *Number of months moving in current direction.
      Indexes reflect newly released seasonal adjustment factors.

      COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

      Commodities Up in Price
      Aluminum* (2); Labor — Temporary (5); Ocean Freight; Plastic Resins; Polypropylene (4); Steel (7); Steel — Carbon; Steel — Hot Rolled (3); Steel Products (2); and Steel Wire.

      Commodities Down in Price
      Aluminum* (8); Corrugated Boxes (6); Diesel (3); Natural Gas (2); Packaging Materials (2); and Steel — Stainless.

      Commodities in Short Supply
      Electrical Components (40); Electronic Components (38); and Steel — Alloy.

      Note: The number of consecutive months the commodity is listed is indicated after each item.
      *Indicates both up and down in price.

      JANUARY 2024 MANUFACTURING INDEX SUMMARIES

      Manufacturing PMI®
      The U.S. manufacturing sector contracted in January, as the Manufacturing PMI® registered 49.1 percent in January, up 2 percentage points compared to December's seasonally adjusted reading of 47.1 percent. This is the highest reading since October 2022, when the PMI® registered a seasonally adjusted 50 percent. "This is the 15th month of contraction. Three out of five subindexes that directly factor into the Manufacturing PMI® are in contraction territory, down from four in December. The New Orders Index broke its 16-month streak in contraction territory by indicating expansion in January. Of the six biggest manufacturing industries, two (Transportation Equipment; and Chemical Products) registered growth in January," says Fiore. A reading above 50 percent indicates that the manufacturing sector is generally expanding; below 50 percent indicates that it is generally contracting.

      A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the January Manufacturing PMI® indicates the overall economy grew for the 45th straight month after one month of contraction (April 2020). "The past relationship between the Manufacturing PMI® and the overall economy indicates that the January reading (49.1 percent) corresponds to a change of plus-1.9 percent in real gross domestic product (GDP) on an annualized basis," says Fiore.

      THE LAST 12 MONTHS

      Month

      Manufacturing
      PMI®

      Month

      Manufacturing
      PMI®

      Jan 2024

      49.1

      Jul 2023

      46.5

      Dec 2023

      47.1

      Jun 2023

      46.4

      Nov 2023

      46.6

      May 2023

      46.6

      Oct 2023

      46.9

      Apr 2023

      47.0

      Sep 2023

      48.6

      Mar 2023

      46.5

      Aug 2023

      47.6

      Feb 2023

      47.7

      Average for 12 months – 47.2

      High – 49.1

      Low – 46.4

      New Orders
      ISM®'s New Orders Index expanded for just the second time in 20 months in January, registering 52.5 percent, an increase of 5.5 percentage points compared to December's seasonally adjusted reading of 47 percent. The New Orders Index contracted in July 2022, registered a seasonally adjusted 50.1 percent in August 2022 and had been in contraction since September 2022. "Of the six largest manufacturing sectors, three (Chemical Products; Transportation Equipment; and Fabricated Metal Products) reported increased new orders. The index in January recorded its best performance since May 2022 (55.3 percent)," says Fiore. A New Orders Index above 52.3 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

      The five manufacturing industries that reported growth in new orders in January are: Apparel, Leather & Allied Products; Primary Metals; Chemical Products; Transportation Equipment; and Fabricated Metal Products. The 10 industries reporting a decline in new orders in January, in order, are: Wood Products; Nonmetallic Mineral Products; Furniture & Related Products; Machinery; Plastics & Rubber Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Computer & Electronic Products.

      New Orders

      %Higher

      %Same

      %Lower

      Net

      Index

      Jan 2024

      20.2

      56.3

      23.5

      -3.3

      52.5

      Dec 2023

      15.5

      57.5

      27.0

      -11.5

      47.0

      Nov 2023

      19.5

      53.0

      27.5

      -8.0

      47.8

      Oct 2023

      15.4

      58.1

      26.5

      -11.1

      46.2

      Production
      The Production Index moved back into expansion territory in January, registering 50.4 percent, 0.5 percentage point higher than the seasonally adjusted December reading of 49.9 percent. The Production Index has been in contraction in 10 of the last 14 months; in addition to this month, the index registered 50 percent or better in May, September and October 2023. "Panelists' companies essentially maintained the levels of output from December and November and now have an opportunity to increase production, based on the 'too low' reading for the Customers' Inventories Index," says Fiore. An index above 52.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.

      The four industries reporting growth in production during the month of January are: Apparel, Leather & Allied Products; Paper Products; Primary Metals; and Transportation Equipment. The 11 industries reporting a decrease in production in January — in the following order — are: Wood Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Textile Mills; Plastics & Rubber Products; Machinery; Furniture & Related Products; Fabricated Metal Products; Computer & Electronic Products; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products.

      Production

      %Higher

      %Same

      %Lower

      Net

      Index

      Jan 2024

      18.4

      57.8

      23.8

      -5.4

      50.4

      Dec 2023

      15.5

      61.5

      23.0

      -7.5

      49.9

      Nov 2023

      18.4

      62.1

      19.5

      -1.1

      48.8

      Oct 2023

      17.3

      62.9

      19.8

      -2.5

      50.0

      Employment
      ISM®'s Employment Index registered 47.1 percent in January, 0.4 percentage point lower than the seasonally adjusted December reading of 47.5 percent. "The index indicated employment contracted for the fourth month in a row (and at a faster rate in January) after one month of expansion and three months of contraction before that. Of the six big manufacturing sectors, only Transportation Equipment expanded. Labor management sentiment at Business Survey Committee respondents' companies still indicates a slowdown in hiring and, in January, a continuation of staff-reduction activity. Attrition, freezes and layoffs were used to reduce head counts. Quits rates remained at 12-month lows. The majority of panelists' comments indicated labor force reductions; in the previous two months, they were equally split between companies hiring and others reducing their labor forces," says Fiore. An Employment Index above 50.3 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

      Of 18 manufacturing industries, three reported employment growth in January: Nonmetallic Mineral Products; Petroleum & Coal Products; and Transportation Equipment. The nine industries reporting a decrease in employment in January, in the following order, are: Paper Products; Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Machinery; Food, Beverage & Tobacco Products; Chemical Products; Computer & Electronic Products; and Miscellaneous Manufacturing. Six industries reported no change in employment in January compared to December.

      Employment

      %Higher

      %Same

      %Lower

      Net

      Index

      Jan 2024

      11.0

      70.6

      18.4

      -7.4

      47.1

      Dec 2023

      11.7

      70.3

      18.0

      -6.3

      47.5

      Nov 2023

      9.3

      71.3

      19.4

      -10.1

      46.1

      Oct 2023

      11.7

      70.9

      17.4

      -5.7

      47.1

      Supplier Deliveries†
      Delivery performance of suppliers to manufacturing organizations was faster for the 16th straight month in January, as the Supplier Deliveries Index registered 49.1 percent, 2.1 percentage points higher than the 47 percent reported in December. After a reading of 52.4 percent in September 2022, the index went into contraction territory in October and has been there since, with an average reading of 46.2 percent over the last 12 months, up from a rolling 12-month average of 46 percent in December. "Panelists' comments continue to indicate that suppliers' performance is improving, but for most industries, delivery promises appear to be stable as inputs transition to a more demand-driven environment," says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

      The five manufacturing industries reporting slower supplier deliveries in January are: Textile Mills; Paper Products; Plastics & Rubber Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The five industries reporting faster supplier deliveries in January are: Computer & Electronic Products; Transportation Equipment; Fabricated Metal Products; Machinery; and Chemical Products. Seven industries reported no change in delivery performance in January compared to December.

      Supplier Deliveries

      %Slower

      %Same

      %Faster

      Net

      Index

      Jan 2024

      9.7

      78.7

      11.6

      -1.9

      49.1

      Dec 2023

      5.2

      83.5

      11.3

      -6.1

      47.0

      Nov 2023

      6.3

      79.7

      14.0

      -7.7

      46.2

      Oct 2023

      9.8

      75.7

      14.5

      -4.7

      47.7

      Inventories
      The Inventories Index registered 46.2 percent in January, 2.3 percentage points higher than the seasonally adjusted 43.9 percent reported in December. "Manufacturing inventories contracted at a slower rate compared to the previous month. Of the six big industries, only Transportation Equipment increased manufacturing inventories in January. Overall, panelists' companies continue to closely watch manufacturing inventory levels but showed signs, as the year began, of a willingness to invest in manufacturing inventory in order to improve on-time deliveries, gain precision in revenue projections and improve overall customer satisfaction," says Fiore. An Inventories Index greater than 44.4 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

      Of 18 manufacturing industries, three reported higher inventories in January: Apparel, Leather & Allied Products; Printing & Related Support Activities; and Transportation Equipment. The nine industries reporting lower inventories in January — in the following order — are: Paper Products; Computer & Electronic Products; Plastics & Rubber Products; Machinery; Electrical Equipment, Appliances & Components; Primary Metals; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Chemical Products. Six industries reported no change in raw materials inventories in January compared to December.

      Inventories

      %Higher

      %Same

      %Lower

      Net

      Index

      Jan 2024

      14.0

      63.8

      22.2

      -8.2

      46.2

      Dec 2023

      11.1

      62.8

      26.1

      -15.0

      43.9

      Nov 2023

      13.8

      59.7

      26.5

      -12.7

      44.3

      Oct 2023

      12.6

      63.8

      23.6

      -11.0

      43.6

      Customers' Inventories†
      ISM®'s Customers' Inventories Index registered 43.7 percent in January, down 4.4 percentage points compared to the 48.1 percent reported in December. "Customers' inventory levels sagged, moving into the 'too low' region, as panelists report their companies' customers have a significant shortage of their products in inventory, which is considered positive for future new orders and production. The index registered its lowest level since October 2022, when it recorded 41.6 percent," says Fiore.

      The two industries reporting customers' inventories as too high in January are: Fabricated Metal Products; and Plastics & Rubber Products. The 11 industries reporting customers' inventories as too low in January, in order, are: Nonmetallic Mineral Products; Paper Products; Primary Metals; Electrical Equipment, Appliances & Components; Wood Products; Furniture & Related Products; Machinery; Miscellaneous Manufacturing; Chemical Products; Transportation Equipment; and Food, Beverage & Tobacco Products.

      Customers'
      Inventories

      %
      Reporting

      %Too
      High

      %About
      Right

      %Too
      Low

      Net

      Index

      Jan 2024

      75

      10.2

      66.9

      22.9

      -12.7

      43.7

      Dec 2023

      79

      13.5

      69.2

      17.3

      -3.8

      48.1

      Nov 2023

      76

      16.3

      69.0

      14.7

      +1.6

      50.8

      Oct 2023

      75

      13.1

      71.0

      15.9

      -2.8

      48.6

      Prices†
      The ISM® Prices Index registered 52.9 percent, 7.7 percentage points higher compared to the December reading of 45.2 percent, indicating raw materials prices increased in January after eight consecutive months of decreases. Of the six largest manufacturing industries, three — Fabricated Metal Products; Transportation Equipment; and Machinery — reported price increases in January. "The Prices Index indicated expansion in the first month of 2024 as new pricing agreements get implemented at panelists' companies. The index reached its highest level since April 2023 (53.2 percent). Twenty percent of companies reported higher prices, compared to 14 percent in December," says Fiore. A Prices Index above 52.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

      In January, the 10 industries that reported paying increased prices for raw materials, in order, are: Printing & Related Support Activities; Textile Mills; Fabricated Metal Products; Furniture & Related Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Transportation Equipment; Plastics & Rubber Products; and Machinery. The three industries reporting paying decreased prices for raw materials in January are: Primary Metals; Chemical Products; and Food, Beverage & Tobacco Products.


      Prices

      %Higher

      %Same

      %Lower

      Net

      Index

      Jan 2024

      19.5

      66.7

      13.8

      +5.7

      52.9

      Dec 2023

      14.2

      61.9

      23.9

      -9.7

      45.2

      Nov 2023

      16.0

      67.7

      16.3

      -0.3

      49.9

      Oct 2023

      11.0

      68.1

      20.9

      -9.9

      45.1

      Backlog of Orders†
      ISM®'s Backlog of Orders Index registered 44.7 percent, a 0.6-percentage point decrease compared to December's reading of 45.3 percent, indicating order backlogs contracted for the 16th consecutive month after a 27-month period of expansion. Of the six largest manufacturing industries, only Transportation Equipment expanded order backlogs in January. "The index remains in contraction, as production rates and new order levels continue to have a negative effect on backlogs," says Fiore.

      Of 18 manufacturing industries, the two that are reporting growth in order backlogs in January are: Primary Metals; and Transportation Equipment. The nine industries reporting lower backlogs in January — in the following order — are: Wood Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Chemical Products; and Miscellaneous Manufacturing. Six industries reported no change in backlog of orders in January compared to December.

      Backlog of
      Orders

      %
      Reporting

      %Higher

      %Same

      %Lower

      Net

      Index

      Jan 2024

      91

      17.5

      54.4

      28.1

      -10.6

      44.7

      Dec 2023

      89

      16.7

      57.1

      26.2

      -9.5

      45.3

      Nov 2023

      91

      9.3

      60.0

      30.7

      -21.4

      39.3

      Oct 2023

      92

      15.2

      54.0

      30.8

      -15.6

      42.2

      New Export Orders†
      ISM®'s New Export Orders Index registered 45.2 percent in January, 4.7 percentage points lower than the December reading of 49.9 percent. "The New Export Orders Index indicated that export orders contracted for the eighth consecutive month, at a much faster rate in January. The index has shown weak performance for the last 18 months. Panelists returned to a more bearish perception for both China and Europe. The index registered its lowest level since May 2020 (39.5 percent)," says Fiore.

      The three industries reporting growth in new export orders in January are: Nonmetallic Mineral Products; Miscellaneous Manufacturing; and Transportation Equipment. The nine industries reporting a decrease in new export orders in January — in the following order — are: Paper Products; Furniture & Related Products; Computer & Electronic Products; Plastics & Rubber Products; Machinery; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Chemical Products; and Fabricated Metal Products.

      New Export
      Orders

      %
      Reporting

      %Higher

      %Same

      %Lower

      Net

      Index

      Jan 2024

      73

      8.4

      73.5

      18.1

      -9.7

      45.2

      Dec 2023

      73

      10.2

      79.4

      10.4

      -0.2

      49.9

      Nov 2023

      71

      7.7

      76.6

      15.7

      -8.0

      46.0

      Oct 2023

      72

      12.3

      74.1

      13.6

      -1.3

      49.4

      Imports†
      ISM®'s Imports Index registered 50.1 percent in January, an increase of 3.7 percentage points compared to December's figure of 46.4 percent. "Imports grew in January after contracting for 14 consecutive months. With the Lunar New Year starting in early February, there should be a continued expansion in the Imports Index, assuming no other external factors. Panelists noted rising ocean freight costs and extended trans-Suez lead times to account for risk in the area," says Fiore.

      The six industries reporting an increase in import volumes in January — listed in the following order — are: Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Miscellaneous Manufacturing; and Transportation Equipment. The five industries that reported lower volumes of imports in January are: Wood Products; Paper Products; Plastics & Rubber Products; Computer & Electronic Products; and Chemical Products. Seven industries reported no change in imports in January.

      Imports

      %
      Reporting

      %Higher

      %Same

      %Lower

      Net

      Index

      Jan 2024

      83

      11.9

      76.3

      11.8

      +0.1

      50.1

      Dec 2023

      82

      7.3

      78.1

      14.6

      -7.3

      46.4

      Nov 2023

      83

      8.2

      76.0

      15.8

      -7.6

      46.2

      Oct 2023

      81

      7.1

      81.5

      11.4

      -4.3

      47.9

      †The Supplier Deliveries, Customers' Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments.

      Buying Policy
      The average commitment lead time for Capital Expenditures in January was 172 days, a decrease of two days compared to December. Average lead time in January for Production Materials was 83 days, an increase of one day. Average lead time for Maintenance, Repair and Operating (MRO) Supplies was 43 days, a decrease of three days compared to December.

      Percent Reporting

      Capital
      Expenditures

      Hand-to-
      Mouth

      30 Days

      60 Days

      90 Days

      6 Months

      1 Year+

      Average
      Days

      Jan 2024

      16

      5

      9

      13

      29

      28

      172

      Dec 2023

      15

      4

      8

      16

      29

      28

      174

      Nov 2023

      14

      3

      9

      14

      32

      28

      178

      Oct 2023

      16

      3

      10

      13

      32

      26

      171

      Percent Reporting

      Production
      Materials

      Hand-to-
      Mouth

      30 Days

      60 Days

      90 Days

      6 Months

      1 Year+

      Average
      Days

      Jan 2024

      8

      23

      30

      24

      10

      5

      83

      Dec 2023

      6

      27

      28

      25

      9

      5

      82

      Nov 2023

      8

      24

      29

      26

      9

      4

      79

      Oct 2023

      7

      24

      27

      26

      12

      4

      83

      Percent Reporting

      MRO
      Supplies

      Hand-to-
      Mouth

      30 Days

      60 Days

      90 Days

      6 Months

      1 Year+

      Average
      Days

      Jan 2024

      29

      37

      16

      13

      5

      0

      43

      Dec 2023

      29

      36

      18

      11

      5

      1

      46

      Nov 2023

      29

      35

      21

      10

      5

      0

      43

      Oct 2023

      29

      33

      21

      11

      5

      1

      46

      About This Report
      DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of January 2024.

      The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

      Data and Method of Presentation
      The Manufacturing ISM® Report On Business® is based on data compiled from purchasing and supply executives nationwide. The composition of the Manufacturing Business Survey Committee is stratified according to the North American Industry Classification System (NAICS) and each of the following NAICS-based industries' contribution to gross domestic product (GDP): Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies). The data are weighted based on each industry's contribution to GDP. According to BEA estimates (the average of the fourth quarter 2022 GDP estimate and the GDP estimates for first, second, and third quarter 2023, as released on December 21, 2023), the six largest manufacturing industries are: Chemical Products; Transportation Equipment; Food, Beverage & Tobacco Products; Computer & Electronic Products; Machinery; and Fabricated Metal Products.

      Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

      The resulting single index number for those meeting the criteria for seasonal adjustments (Manufacturing PMI®, New Orders, Production, Employment and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The Manufacturing PMI® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries, and Inventories (seasonally adjusted).

      Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Manufacturing PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A Manufacturing PMI® above 42.5 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.5 percent, it is generally declining. The distance from 50 percent or 42.5 percent is indicative of the extent of the expansion or decline. With some of the indicators within this report, ISM® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM® Report On Business® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to report on information for the current month for U.S. operations only. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM® then compiles the report for release on the first business day of the following month.

      The industries reporting growth, as indicated in the Manufacturing ISM® Report On Business® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

      Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted.

      ISM ROB Content
      The Institute for Supply Management® ("ISM") Report On Business® (both Manufacturing and Non-Manufacturing) ("ISM ROB") contains information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content (collectively, "Content") of ISM ("ISM ROB Content"). ISM ROB Content is protected by copyright, trademark, trade secret, and other laws, and as between you and ISM, ISM owns and retains all rights in the ISM ROB Content. ISM hereby grants you a limited, revocable, nonsublicensable license to access and display on your individual device the ISM ROB Content (excluding any software code) solely for your personal, non-commercial use. The ISM ROB Content shall also contain Content of users and other ISM licensors. Except as provided herein or as explicitly allowed in writing by ISM, you shall not copy, download, stream, capture, reproduce, duplicate, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any ISM ROB Content.

      Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, data streams, time-series variables, fonts, icons, link buttons, wallpaper, desktop themes, online postcards, montages, mashups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. This prohibition applies regardless of whether the derivative works or materials are sold, bartered, or given away. You shall not either directly or through the use of any device, software, internet site, web-based service, or other means remove, alter, bypass, avoid, interfere with, or circumvent any copyright, trademark, or other proprietary notices marked on the Content or any digital rights management mechanism, device, or other content protection or access control measure associated with the Content including geo-filtering mechanisms. Without prior written authorization from ISM, you shall not build a business utilizing the Content, whether or not for profit.

      You shall not create, recreate, distribute, incorporate in other work, or advertise an index of any portion of the Content unless you receive prior written authorization from ISM. Requests for permission to reproduce or distribute ISM ROB Content can be made by contacting in writing at: ISM Research, Institute for Supply Management, 309 West Elliot Road, Suite 113, Tempe, Arizona 85284-1556, or by emailing [email protected]. Subject: Content Request.

      ISM shall not have any liability, duty, or obligation for or relating to the ISM ROB Content or other information contained herein, any errors, inaccuracies, omissions or delays in providing any ISM ROB Content, or for any actions taken in reliance thereon. In no event shall ISM be liable for any special, incidental, or consequential damages, arising out of the use of the ISM ROB. Report On Business®, PMI®, Manufacturing PMI®, Services PMI®, Hospital PMI®, and NMI® are registered trademarks of Institute for Supply Management®. Institute for Supply Management® and ISM® are registered trademarks of Institute for Supply Management, Inc.

      About Institute for Supply Management® (ISM®)
      Institute for Supply Management® (ISM®) is the first and leading not-for-profit professional supply management organization worldwide. Its community of more than 50,000 in more than 100 countries manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 by practitioners, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM empowers and leads the profession through the ISM® Report On Business®, its highly-regarded certification and training programs, corporate services, events and assessments. The ISM® Report On Business®, Manufacturing, Services, and Hospital, are three of the most reliable economic indicators available, providing guidance to supply management professionals, economists, analysts, and government and business leaders. For more information, please visit: www.ismworld.org.

      The full text version of the Manufacturing ISM® Report On Business® is posted on ISM®'s website at www.ismrob.org on the first business day* of every month after 10:00 a.m. ET. The one exception is in January, the report is released on the second business day of the month.

      The next Manufacturing ISM® Report On Business® featuring February 2024 data will be released at 10:00 a.m. ET on Friday, March 1, 2024.

      *Unless the New York Stock Exchange is closed.

      Contact:       

      Kristina Cahill


      Report On Business® Analyst


      ISM®, ROB/Research Manager


      Tempe, Arizona


      +1 480.455.5910


      Email: [email protected]

      SOURCE Institute for Supply Management

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