U.S. factories saw increased orders and quickened production resulting in the first expansion the manufacturing sector has experienced since 2022, which has signalled a cause for future-focused optimism.
According to the Institute for Supply Management (ISM)’s manufacturing gauge, activity was up 1.7 points in January to 50.9, which is the highest it has been since September 2022, and indicates growth. These figures pre-date the tariff announcements, which could have a negative effect, as could a stronger U.S. dollar. Producers must also contend with higher costs, which is reflected in the gauge of prices paid, which rose by 2.4 points to 54.9, the highest since May 2022.
New orders were up three points to 55.1, which is the strongest performance posted since May 2022, and was the fifth straight month with an index increase, which denotes growth in demand and output. The production gauge also expanded by 2.6 points to 52.5, the best it has performed since March 2022, and another growth indicator over 50. Figures like these could necessitate the addition of resources to sustain growth in demand. Last month was the first time since last May that the factory employment index expanded.
