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US manufacturing growth still brisk but edges lower in January: survey
[WASHINGTON] Growth in the US manufacturing sector remained robust in January, moderating only slightly from December's near-record performance, according to an industry survey released Wednesday.
Mounting prices as well as rising deliveries and inventories for manufactured goods meant the sector, crucial to the US economy, carried its momentum into the start of 2018, the Institute for Supply Management said.
ISM's monthly Purchasing Manufacturer's Index slowed a token 0.2 percentage points to 59.1 per cent, which beat an analyst forecast by six tenths and marked the third-highest level since 2011. Any reading above 50 per cent indicates growth.
Of the 18 manufacturing industries surveyed, 14 reported expansion, down two from December, according to the report.
"All six big industry sectors, accounting for 71 per cent of manufacturing GDP, continued to expand export activity during the period," Timothy Fiore, chair of ISM's Manufacturing Business Survey Committee, said in a statement.
The report marked the 17th consecutive month of uninterrupted expansion for the sector but the index for employment fell 3.9 points to 54.2 per cent - held down limits on capacity, as well as weather and seasonal adjustment factors, Fiore said.
The exports index rose 2.2 points to 59.8 per cent, the highest since 2011, and the prices index, a possible sign of future consumer inflation, jumped 4.4 points to 72.7 per cent.
Those surveyed reported strong demand but tight labor supplies.
"Employment is very tight in our area," one respondent from the food, beverage and tobacco category said.
"Business is starting the new year strong. Consumer confidence seems to be driving a lot of our customers' order requirements higher," said another in paper and plastics.
Ian Shepherdson of Pantheon Macroeconomics said the report suggested manufacturing was in for continued, steady growth.
"Stepping back from the monthly noise, we think the trend in the ISM is strong and stable," he said in a note to clients.
"It's hard to see good reasons to expect further sustained increases, but equally we don't expect to see a material weakening in the trend anytime soon."