The ISM Manufacturing survey improved and remained in expansion. The key internals remain mixed but improved. The Markit PMI manufacturing Index, also released today, is in positive territory and improved.

Analyst Opinion of the ISM Manufacturing Survey

ISM manufacturing index movements have correlated with Industrial Production Manufacturing index only half the time in the last 12 months. Based on this survey and the unusually unified district Federal Reserve Surveys (all in expansion, one would expect the Fed’s Industrial Production index to be improved in Janurary. Overall, surveys do not have a high correlation to the movement of industrial production (manufacturing) since the Great Recession..Note that new orders sub-index insignificantly improved.

The ISM Manufacturing survey index (PMI) marginally improved from 54.5 to 56.0 (50 separates manufacturing contraction and expansion). This was slightly above expectations from Bloomberg / Econoday which were 54.0 to 56.8 (consensus 55.0).

Earlier today, the Markit PMI Manufacturing Index was released:

Strongest manufacturing production growth for almost two years

• Robust expansion of output volumes at the start of 2017
• New order growth accelerates to a 28-month high
• Fastest rise in input costs since September 2014
• US manufacturers signalled a strong start to 2017, with both output and new order growth accelerating since the end of last year. Improving business conditions were also reflecting in a sustained upturn in payroll numbers and the steepest rise in stocks of finished goods since the index began in 2007. Meanwhile, manufacturers reported that confidence regarding the year-ahead business outlook was the strongest since March 2016, which was mainly linked to hopes of a continued upturn in domestic economic conditions.
• At 55.0 in January, up from 54.3 in December, the seasonally adjusted Markit final US Manufacturing Purchasing Managers’ Index™ (PMI™) signalled a robust and accelerated improvement in overall business conditions across the manufacturing sector. The latest reading was little changed from the earlier ‘flash’ reading of 55.1 and pointed to the fastest upturn in manufacturing performance since March 2015. All five index components exerted a positive influence in the headline PMI in January, led by the sharpest expansion of incoming new work for over two years.