U.S. factories grew at a slower pace in January

U.S. factories grew at a slower pace in January

"It's another reminder, not that we need it, vaccine deployment still has a long way to go before COVID loses its place as the biggest risk to economic growth", said Chris Low, chief economist at FHN Financial in NY.

The December reading was the index's highest since it stood at 60.8% in August 2018.

The ISM revised data going back to 2012.

Manufacturing has been driven by strong demand for goods like electronics and furniture as 23.7% of the labor force works from home because of the coronavirus outbreak.

Manufacturing activity in Indonesia increased at a faster pace in January than in December, and such activity stopped contracting in the Philippines.

With the distribution of vaccines to fight the coronavirus expected to broaden and accelerate, spending on services is likely to pick up by summer. This could result in a slowdown in manufacturing activity from current levels. The ISM measure of customer stockpiles fell to 33.1, the lowest level since December 2009. Factory stocks are also very lean. That followed a 1.1% jump in November. The dollar appreciated against a basket of currencies. U.S. Treasury prices were lower.

Perhaps the main manufacturing-related concern, according to Fiore, is related to labor constraints. A respondent in miscellaneous manufacturing said a rise in the number of employees with COVID has negatively impacted production.

Chinas manufacturing growth weakened in January, according to two surveys, suggesting its rebound from the coronavirus pandemic is leveling off.

Rs 3,726 Crore Allocated For Digital Census In Budget: Nirmala Sitharaman
All the aforementioned Budget documents will be available on the app after the completion of the FM's speech in the Parliament this afternoon .

Due to seasonal factors, the expansion of the construction industry slightly dropped, with the sub-index for business activities standing at 60, down from 60.7 in the previous month.

China's economy expanded a faster-than-expected 6.5 per cent in the fourth quarter past year, as factories raced to fill overseas orders. Despite the cool-off in orders, factories increased hiring last month.

Although it remains above the 50 mark that separates growth from contraction, the index was below a median market forecast for a reading of 52.7. That raises hopes for a rebound in hiring this month after the economy shed jobs in December for the first time in eight months.

Five of the six biggest manufacturing industries had moderate to strong growth in January, including chemical products; fabricated metal products; transportation equipment; food, beverage and tobacco products; and computer and electronic products.

Job losses have been disproportionately in the services industry.

Mr Takeshi Okuwaki, an economist at Dai-ichi Life Research Institute in Tokyo, said Japanese manufacturers may slash output as the state of emergency will unavoidably hurt the economy.

Factories across parts of Europe, as well as in China and Japan, struggled as renewed lockdown measures alongside supply shortages hurt activity, surveys showed. That drove costs for manufacturers even higher. The prices index "surged dramatically in January, hitting a level last reached in April 2011, indicating continued supplier pricing power", Fiore said.

Related Articles