WASHINGTON – Manufacturing growth accelerated in January for a fifth consecutive month on stronger orders and production that signal America’s factories are rebounding.
The Institute for Supply Management’s index rose to 56, the highest since November 2014, from 54.5 the prior month, data from the Tempe, Ariz.-based group showed Wednesday. The median forecast in a Bloomberg survey of economists called for 55. A reading above 50 signals expansion.
The report showed the gauges of production and orders also climbed to more than two-year highs, underscoring sustained improvement in manufacturing following a soft patch in mid-2016. Stronger demand is helping drive up costs of raw materials, as a measure of prices paid jumped to the highest since May 2011, adding to signs of inflation picking up worldwide.
Comments from respondents were “generally positive regarding demand levels and business conditions,” Bradley Holcomb, chair of the ISM survey committee, said in a statement.
Twelve of 18 industries surveyed by the purchasing managers’ group posted expansion, including machinery, transportation equipment, and computer and electronic products.
The ISM new orders gauge advanced to 60.4 from 60.3 the prior month, while the index of production rose to 61.4 from 59.4. Both measures were the strongest since November 2014.
Steady growth is helping to boost hiring, as the factory employment index jumped in January to 56.1, the fifth straight gain and the highest since August 2014.
The index of export orders eased to 54.5 from 56, which was the highest since May 2014, while the gauge of supplier deliveries rose to 53.6 from 53. The report also showed the index of prices paid surged to 69 from 65.5.