Economic activity in the manufacturing sector grew in January — with the overall economy achieving a 20th consecutive month of growth — and the January Manufacturing PMI registered 57.6%, a decrease of 1.2 percentage points from the seasonally adjusted December reading of 58.8%, according to supply executives in the latest Manufacturing ISM Report on Business.

The report was issued by Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee.

Fiore wrote that the change indicates “expansion in the overall economy for the 20th month in a row after a contraction in April and May 2020.”

The New Orders Index registered 57.9%, down 3.1 percentage points compared to the seasonally adjusted December reading of 61%. The Production Index registered 57.8%, a decrease of 1.6 percentage points compared to the seasonally adjusted December reading of 59.4%.

The Prices Index registered 76.1%, up 7.9 percentage points compared to the December figure of 68.2%The Backlog of Orders Index registered 56.4%, 6.4 percentage points lower than the December reading of 62.8%.

The Employment Index registered 54.5%, 0.6 percentage point higher compared to the seasonally adjusted December reading of 53.9%. The Supplier Deliveries Index registered 64.6%, down 0.3 percentage point from the December figure of 64.9%.

The Inventories Index registered 53.2%, 1.4 percentage points lower than the seasonally adjusted December reading of 54.6%. The New Export Orders Index registered 53.7%, up 0.1 percentage point compared to the December reading of 53.6%. The Imports Index registered 55.1%, a 1.3-percentage point increase from the December reading of 53.8 percent.

“The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, but January was the third straight month with indications of improvements in labor resources and supplier delivery performance,” Fiore wrote. “Still, there were shortages of critical intermediate materials, difficulties in transporting products and lack of direct labor on factory floors due to the COVID-19 omicron variant. Quits rate and early retirements hinder reliable consumption. Panel sentiment remains strongly optimistic, with seven positive growth comments for every cautious comment, up from December’s ratio of 6-to-1.”