Breaking News Bar
updated: 2/3/2014 11:34 AM

U.S. factories expanded at much slower pace in Jan.

hello
Success - Article sent! close
  • U.S. manufacturing barely expanded last month as factories cut back sharply on production, and new orders plunged.

      U.S. manufacturing barely expanded last month as factories cut back sharply on production, and new orders plunged.
    Associated Press

 
Associated Press

WASHINGTON -- U.S. manufacturing barely expanded last month as cold weather delayed shipments of raw materials and caused some factories to shut down.

The Institute for Supply Management, a trade group of purchasing managers, said Monday that its index of manufacturing activity fell to 51.3 in January from 56.5 in December. It was the lowest reading since May, though any reading above 50 signals growth. Manufacturers said export orders grew at a healthy pace but slightly less than in the previous month.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

The figures suggest that U.S. manufacturing is slowing after a strong finish to last year. Auto sales have decelerated, and businesses are spending cautiously on machinery and other large factory goods. The slowdown means that economic growth in the first three months of this year may be less than the strong 3.6 percent annual pace in the second half of 2013.

In addition, China's factory output grew at a slower pace in January, a government report over the weekend showed. That report added to concerns that the world's second-largest economy is weakening.

On the positive side, a measure of Europe's manufacturing sector showed that it expanded at the fastest pace in nearly three years.

Some economists cautioned against reading too much into Monday's report on U.S. manufacturing, given the weather impact. George Mokrzan, chief economist at Columbus, Ohio-based Huntington Bank, said there were some "very unusual shutdowns as a result of the cold weather" at auto plants and other factories.

"I'd be a little bit cautious about interpreting too much from this report," Mokrzan said. "If we don't get a bounce next month, I would start asking deeper questions."

Monday's report showed that a measure of new orders plummeted 13.2 points to 51.2. That is the steepest drop since December 1980. A gauge of production also fell. Factories added jobs, the report showed, but at a slower pace.

Bradley Holcomb, chair of the ISM's survey committee, said cold weather affected the report in several ways. Factory closings led to lower output and caused manufacturers to receive fewer new orders. Stockpiles of raw materials also fell as trucking routes were closed and shipping was delayed.

Other recent indicators have painted a mixed picture of manufacturing.

Factory output rose for a fifth straight month in December, according to the Federal Reserve. Manufacturers cranked out more cars, trucks, appliances and processed food.

But businesses are still spending cautiously. Orders for machinery and other large factory goods fell in December.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here