U.S. ISM manufacturing index likely to have risen further in January

The U.S. ISM manufacturing index is expected to have risen again in January. After recording a seven-month low of 49.4 in August 2016, the index rose by a total of 5.1 points from August to December. Leading the growth was new orders index rise that rose to 60.3 in December from 48.9 in November, along with rise in production that recorded 59.4, a rise from 49.3.

There was also a moderate rise in employment to 52.8 in December from 48.7 in November. The four straight rises in the ISM index have been impressive, particularly after dollar’s appreciation, policy uncertainty and weakness in spending on capital equipment.

Moreover, the recent stretch of rises has witnessed the national factory measure outperform its regional counterparts. The average ISM adjusted measure of five regional factory measures in August was 49.2, nearly consistent with the national ISM reading of 49.4. But from September to December the level of the national index has averaged almost two points higher than its ISM-adjusted counterpart, noted Societe Generale in a research report.

The ISM-adjusted regional measure was up to 54.6 in January from 52.4 in December, indicating towards another rise in the ISM measure.