A report from the Institute for Supply Management (ISM) showed on Wednesday
the U.S. manufacturing sector’s activity contracted further in January 2023.
The ISM's index of manufacturing activity - the manufacturing PMI - checked
in at 47.4 percent in January 2023, up 1.0 percentage point from an unrevised December
reading of 48.4 percent. The January
reading pointed to a contraction in the U.S. manufacturing sector for the third
straight month, the pace of which was also the sharpest since May 2020 (43.5 percent).
Economists had anticipated the indicator to slip to 48.0 percent.
According to the report, the New Orders Index decreased 2.6 percentage
points to 42.5 percent last month, remaining in contraction territory for the fifth
consecutive month, while the Production Index dropped 0.6 percentage points to 48.0
percent, indicating the second month of shrinkage. In addition, the Employment
Index edged down 0.2 percentage points to 50.6 percent,
expansion territory for the second month in a row. Meanwhile, the Supplier
Deliveries Index advanced 0.5 percentage points to 45.6 percent, indicating
that the delivery performance of suppliers to manufacturing organizations was
quicker for a fourth straight month. The Backlog of Orders Index jumped 2.0
percentage points to 43.4 percent, indicating order backlogs declined for the
fourth consecutive month after a 27-month period of growth. On the price front, the Prices Index surged 5.1 percentage points to 44.5 percent,
its highest level in three months, indicating raw materials prices dropped for
the fourth straight month after a 28-month period of growth.