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U.S. Manufacturing Is Bouncing Back

After six straight months of contracting, U.S. manufacturing has bounced back based on the ISM Manufacturing Purchasing Managers Index [PMI]. The current PMI is over 50 at a value of 50.9 in January 2020. A value over 50 indicates expansion. Notably, the PMI value was over 60 until fall of 2018 when it dropped precipitously. Although the current reading is a positive sign that the manufacturing in the U.S. is recovering, it is only one month’s reading. The manufacturing turnaround in January was driven by gains in new orders, production, and deliveries. However, employment in the manufacturing sector is still contracting, so optimism should be tempered.

LLumin's Insight

There has been much discussion of the state of manufacturing in America, with many pundits seeing gloomy times in industries such as automotive. Other forms of manufacturing are starting to show signs of a comeback. In January 2020, some industries have rebounded, and eight out of the 18 industries reported growth, according to research cited in a Seeking Alpha report. Listed in order, these are Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Chemical Products; and Fabricated Metal Products. Learn which manufacturing industries have contracted.

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