Manufacturing Index Increased In January, Up From Record Low

The Institute for Supply Management, a trade group of purchasing executives, said that its manufacturing index rose to 35.6 in January from an upwardly revised 32.9 in December. The January reading was above the 32.6 that economists surveyed by Thomson Reuters expected.

Any reading above 50 signals growth, while a reading below 50 indicates contraction. The index has fallen steadily since August as the economy deteriorated, hitting a 28-year low in December.

The report, which is based on a survey of members of the New York-based group, covers such indicators as new orders, production, employment, inventories, prices, and export and import orders. On a more positive note, Norbert Ore, chairman of the institute’s manufacturing business survey committee said the index continues to show significant deflation of the prices manufacturers must pay for materials, which ultimately should help consumers.

The Commerce Department on Friday reported that the economy shrank at a 3.8% pace in the fourth quarter, the worst showing in a quarter-century. Industries reporting growth in January, included textile mills, petroleum and coal products, according to the survey. Nonmetallic mineral products, electrical equipment, appliances, paper products, and plastics and rubber all contracted last month.