Economy

ISM: Manufacturing expands in January for first time in years
Written by Brett Linton
February 4, 2025
Following more than two years of contraction, US manufacturing activity rebounded in January, according to supply executives contributing to the Institute for Supply Management (ISM)’s latest report. Prior to January, the Index had indicated a contracting manufacturing sector in 25 of the previous 26 months.
The ISM Manufacturing PMI (Purchasing Managers Index) registered 50.9% in January, an increase of nearly two points from December. This marks the highest reading since September 2022.
An Index reading above 50% indicates the manufacturing economy is growing, while a reading below that means it is contracting.
ISM noted that the overall economy continued to expand in January for the 57th consecutive month, emphasizing that a PMI reading above 42.5% generally indicates that the overall economy is growing.
“Demand and production improved; and employment expanded. However, staff reductions continued with many companies, but at weaker rates. Prices growth was moderate, indicating that further growth will put additional pressure on prices,” said ISM Chair Timothy R. Fiore.
He noted that moderating price increases at a slower rate will be a significant challenge for manufacturers this year as demand grows.
Half of the 16 manufacturing industries ISM tracks reported growth in January. The primary metals industry was one of those, while the fabricated metal products sector again reported negative growth.
Executive comments
The report shares select comments from responding companies. An executive in the primary metal sector remarked, “Automotive order demand continues to be consistent and on a steady pace. Beginning to look at hiring additional team members once again. Pricing is holding firm. Having to work overtime to cover plant inefficiency to date.”
Another comment from a fabricated metal products industry head was also optimistic, saying, “Capital equipment sales are starting 2025 off strong. Normally, we see a soft start to the year, so this strong start is unusual.”

Brett Linton
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