ISM Index Finds US Manufacturing Expanding at Fastest Rate Since 2004

Bloomberg News (2/1, Chandra) writes that the January report from the Institute for Supply Management (ISM), released on Thursday, found that “US factories expanded more than forecast in January and near the fastest pace in more than 13 years, indicating manufacturing was still powering ahead at the start of 2018.” The AP (2/1, Wiseman) reports that “American manufacturers expanded again last month, though more slowly than in December,” as the January index read 59.1, having been revised to a reading of 59.3 for December. The AP adds that “among 18 manufacturing industries, 14 grew in January,” and “export orders grew faster, while manufacturers’ new orders, production and hiring increased more slowly.” In general, “American industry remains strong,” and “the American economy as a whole appears to be generally healthy.” Reuters (2/1, Mutikani) reports that in addition to the ISM Index reading, “an unexpected drop in the number of Americans filing for unemployment benefits last week pointed to sustained labor market strength that should underpin domestic demand.” Reuters adds that “manufacturers reported an increase in export orders and most offered an upbeat assessment of business conditions.” Bloomberg News (2/1) interviewed ISM Manufacturing Business Survey Chairman Timothy Fiore on a January report that showed “manufacturing continues expansion” amid “strong demand.” MarketWatch (2/1, Robb) reports that “the manufacturing sector had a stellar year in 2017.” The Wall Street Journal (2/1, Mitchell, Subscription Publication) also reports.

Tax Reform Impact

In a press release, the National Association of Manufacturers (1/31) published video of an interview on Fox Business on Wednesday with NAM President and CEO Jay Timmons and NAM member Steve Staub of Staub Manufacturing Solutions, as they discussed the importance of tax reform for manufacturers and reaction to President Trump’s State of the Union address. The release also quotes excerpts from the interview. Timmons said the Trump administration has achieved “a completely new direction for the economy and manufacturers,” adding that “manufacturers have been talking for 30 years about the need for a competitive tax policy, reasonable regulations” and “we finally got those.” As a result, Timmons adds, “what you will see is exactly what our survey shows: two-thirds of manufactures said they’re going to invest in new plants and equipment, three-fifths say they’re going to hire new workers, a majority of them say they’re going to provide better pay and benefits.” Staub is quoted saying “there’s an optimism” among manufacturers, adding that “they’re going to add a lot of new jobs.”

Plastics News (1/31, Toloken) reported on reaction from the manufacturing community to President Trump’s State of the Union address on Tuesday. The article quoted NAM President and CEO Jay Timmons saying, “Manufacturers were very encouraged to hear the president call for a $1.5 trillion investment in infrastructure improvements in this country,” adding that it “will help us become more competitive and hire more people and lift the quality of life for all Americans.” Plastics News added that the “NAM noted that 2017’s job gains were a turnaround from net job losses in manufacturing in 2016, and the group has been heavily touting what it says are no net gain in regulations and other positives from the Trump administration.” Timmons called the President’s speech “very impactful,” pointing out that “one of its member companies, Staub Manufacturing Solutions in Dayton, Ohio, attended as a guest of the White House.” Timmons also “tied recent growth at Staub to the Trump administration’s tax cuts and regulatory changes.” Timmons also spoke to Congress’ plans to address the Deferred Action for Childhood Arrivals (DACA) program, saying, “We were also very pleased to hear that he’s calling for a path forward, in a bipartisan way, for those dreamers who know no other country besides the United States.” The Troy (NY) Daily News (2/1, Fox) also reports on Staub’s attendance at the State of the Union. Meeting with President Trump, the Daily News writes, Staub “told him the industry would benefit from tax reform, healthcare reform and regulatory reform.”

The Metal Treating Institute is a member of the Council of Manufacturing Associations through NAM with over 120,000 combined member companies in over 250 manufacturing industries.