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January Manufacturing Index: Production, New Orders Growing

Tuesday, February 04, 2003

Press release from the issuing company

(Tempe, Arizona) – Economic activity in the manufacturing sector grew for the third consecutive month. The overall economy grew for the 15th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business. The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation. "The manufacturing sector continued its growth trend in January, though the rate of growth slowed when compared to December. It is encouraging that New Orders continued strong in January. Production also fared well, providing cause for optimism for an improving economy in the first quarter." ISM's Backlog of Orders Index indicates that order backlogs declined for the seventh consecutive month. ISM's Supplier Deliveries Index reflects slower deliveries for the 13th consecutive month. Manufacturing employment continued to decline in January as the index remained below the breakeven point (an index of 50 percent) for the 28th consecutive month. ISM's Prices Index is above 50 percent as manufacturers experienced higher prices for the 11th consecutive month. New Export Orders grew in January for the 13th consecutive month. January's Imports Index grew for the third consecutive month. Comments from purchasing and supply executives offered some expressions of optimism while still expressing concerns about possible war. Adding to the list of concerns, energy prices are a major factor as oil and natural gas prices are skyrocketing. ISM's PMI is 53.9 percent in January, a decrease of 1.3 percentage points when compared to 55.2 in December. ISM's New Orders Index declined 3.2 percentage points from 62.9 percent in December to 59.7 percent in January. ISM's Production Index declined 0.3 percentage point from 56.6 percent in December to 56.3 percent in January. The ISM Employment Index is at 47.6 percent for January, a decrease of 0.6 percentage point when compared to the 48.2 percent reported in December. ISM's Supplier Deliveries Index registered 52.6 percent, the same as in December. ISM's Inventories Index declined to 45.4 percent from 46.2 percent in December. ISM's Customers' Inventories Index for January is at 42.5 percent, a decrease of 0.5 percentage point compared to the December reading of 43.0 percent. ISM's Prices Index in January is 57.5 percent, an increase of 0.6 percentage point from December's 56.9 percent. ISM's Backlog of Orders Index declined 1.5 percentage points from 46.5 percent in December to 45 percent in January. ISM's New Export Orders Index registered 55.6 percent, up 3.1 percentage points from December's 52.5 percent. ISM's Imports Index rose from 54.8 percent in December to 59 percent in January. "Overall, the signs are still positive for the first quarter. The strength in new orders is encouraging as both domestic and export orders are growing. Customers' Inventories remain low and provide prospects for continuing strength in New Orders," said Ore. Of the 20 industries in the manufacturing sector, nine industries reported growth: Apparel; Transportation & Equipment; Furniture; Food; Chemicals; Electronic Components & Equipment; Fabricated Metals; Industrial & Commercial Equipment & Computers; and Primary Metals. "There were no reports of commodities in short supply. Commodities reported up in price are: #2 Fuel Oil, Caustic Soda, Chemicals, Chlorine, Energy, Gasoline, Hydrochloric Acid, Methanol, Natural Gas, Nickel, Oil, Plastic, Resin, and Steel. Commodities reported down in price are: Corrugated, HDPE, and Hot-Rolled Steel Coil," Ore stated.




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