US manufacturing continues marching forward following a strong end to 2016.
The Institute of Supply Management’s purchasing manager’s index (PMI) rose to 56.0 in January, above economists’ expectations of an uptick to 55.0.
A reading above 50 suggests that the industry is still expanding.
Notably, most respondents articulated that January was a strong start to the year, and that business conditions remain positive.
“Strong start to the new year. Production is increasing and we are adding capacity,” one respondent in plastics and rubber products said.
“Sales bookings are exceeding expectations. We are starting to see supply shortages in hot rolled steel due to the curtailment of imports,” another from the machinery sector added.
The report also noted that the Price index came in at 69.0, an increase of 3.5 from the prior reading.
Moreover, Markit manufacturing PMI came in at 55.0 in January, just a hair lower than the expectations of 55.1.
The report noted that the start of 2017 saw a “robust” expansion of output volumes, new orders accelerated to a 28-month high, and January saw the fastest rise in input costs since September 2014.
“The US manufacturing sector has started 2017 with strong momentum. Despite exports being subdued by the strong dollar, order books are growing at the fastest pace for over two years on the back of improved domestic demand,” Chris Williamson, Chief Business Economist at IHS Markit said in the report.
“With optimism about the year ahead at the highest since last March, the outlook has also brightened.”