Economic activity in U.S. manufacturing grew during January, marking the 20th consecutive month of growth according to the latest manufacturing ISM report. The January Manufacturing PMI was 57.6%, down from December’s seasonally adjusted rate of 58.8% (anything over 50%) indicates growth).
The food, beverage, and tobacco products sector was one of the 14 manufacturing industries that reported growth during the month. Some challenges persist, though, including shortages of critical intermediate materials and lack of direct labor on factory floors due to the COVID-19 omicron variant.
The prices index went from 68.2% in December to 76.1% in January, an increase of 7.9 percentage points. Several commodities are in short supply, including temporary labor, which has been on this list for nine consecutive months. “Our suppliers are having difficulty meeting scheduled releases as their suppliers experience delays and shortages, so lead times and inventories are struggling, resulting in lost production,” one industry respondent said.
ISM Chair Timothy R. Fiore said that “The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment,” but noted that January was the third straight month with indications of improvements in both labor resources and supplier delivery performance. He also remarked that “Panel sentiment remains strongly optimistic, with seven positive growth comments for every cautious comment, up from December’s ratio of 6-to-1.”