“Comments from the panel were positive, with sentiment improving compared to December,” said Timothy Fiore. “The PMI® returned to expansion territory for the first time since July 2019. Demand expanded, with (1) the New Orders Index growing at a moderate rate supported by new export order expansion, (2) the Customers’ Inventories Index remaining at ‘too low’ status and (3) the Backlog of Orders Index contracting for the ninth month, but at a slower rate. Consumption (measured by the Production and Employment Indexes) expanded to respond to new order intake, contributing positively (a combined 10.9-percentage point increase) to the PMI® calculation. Inputs — expressed as supplier deliveries, inventories and imports — weakened in January, due primarily to increasing contraction in inventories while supplier deliveries remained in expansion territory, but at a modest rate. Imports expansion returned, but also at a moderate rate. Inputs contributed negatively to the PMI® calculation, a reversal from the previous month. Prices increased for the second month, a positive for 2020.
“Global trade remains a cross-industry issue, but many respondents were positive for the first time in several months. Among the six big industry sectors, Food, Beverage & Tobacco Products remains the strongest, followed closely by Computer & Electronic Products. Petroleum & Coal Products is the weakest. Overall, sentiment this month is moderately positive regarding near-term growth,” says Fiore.
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