Manufacturing improved for the second month in a row for January, according to an Institute for Supply Management report released today.
The index based on surveys of purchasing managers rose to 53.1%, a 2.9-percentage-point increase over December's 50.2%. This newest report solidifies the sector's 50%+ reading after a dip below in November. A rating above 50% indicates that manufacturing is expanding. The PMI's average over the past 12 months has been 51.6%.
Market analysts had expected a slight rebound to 50.7%. Instead, the reading bounced back to the highest number since May 2012's 52.5%.
The Institute's individual indices for new orders, production, and employment all moved higher for January. New orders, led by textile mills, bumped up to 53.3% to beat December's 49.7%. Production clocked in 1 percentage point higher than December at 53.6%, boosted primarily by electrical equipment manufacturing. Employment topped the bunch, adding 2.1 percentage points to its index to reach 54% for January. Industries showing growth in employment were led by petroleum and coal products and plastics and rubber products.