U.S. Manufacturing Expands Rapidly in January

U.S. manufacturing expanded rapidly in January, nearly matching the pace of August 2004, according to the Manufacturing ISM Report on Business.

The purchasing managers index jumped 3.5 percentage points to 58.4 percent, the highest mark since 58.5 percent in August five and a half years ago. January is the sixth consecutive month of growth after 13 months in a row of declining activity in the manufacturing sector. New orders, production and employment are growing while inventories are contracting and supplier deliveries are slower, ISM said.

The overall economy grew for the ninth consecutive month in January, as the U.S. Commerce Department reported Friday gross domestic product expanded 5.7 percent.

"This month's report provides significant assurance that the manufacturing sector is in recovery,” said Norbert J. Ore, chair of the ISM survey committee. “Both the new orders and production indexes are above 60 percent, indicating strong current and future performance for manufacturing. This month, 13 of 18 industries reported growth, up from nine industries last month, and this is a good indication that the impact of the recovery is expanding."

Contact Thomas L. Gallagher at tgallagher@joc.com.