Strongest U.S. manufacturing production growth for almost two years
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.
January data revealed a renewed acceleration in output growth among manufacturing firms, with the rate of expansion reaching its strongest for 22 months.
Survey respondents noted that greater production volumes had been underpinned by improved client demand and efforts to boost inventory levels at the start of 2017.
Reflecting this, latest data signalled the fastest accumulation of post-production stocks for almost ten years.
New business growth picked up again in January, thereby signalling a sustained turnaround from the soft patch seen during the third quarter of 2016.
Anecdotal evidence indicated that stronger order books reflected an improved economic backdrop and a corresponding rise in clients’ willingness to spend.
However, export sales growth remained only marginal at the start of 2017, suggesting a continued drag on external demand from the strong dollar.
Input buying gathered momentum during January, largely in response to increased production schedules.
The latest upturn in purchasing activity was the fastest since March 2015, which was in line with the trends seen for output and new business intakes.
The latest survey also pointed to another rise in stocks of purchases and a solid expansion of workforce numbers. ■