US manufacturing sector likely to remain suppressed in coming months

The Institute for Supply Management said its manufacturing index rose to 48.2% last month from 48% in December. Data showed the sector contracted for the fourth straight month but the pace of deterioration stabilized.

February manufacturing surveys have been weak so far. Wider credit spreads and tighter financial conditions have historically been an important negative factor for the manufacturing industry. An inventory correction is ongoing and is likely to continue for some time, which should keep a lid on the ISM index.

"Concerns about global growth, the stronger dollar, and low energy prices will likely continue to linger, and we expect the slow growth in manufacturing activity to be protracted. In addition, regional manufacturing surveys received thus far in January have been weak. As such, we expect the ISM manufacturing index to remain low, at 48.0, at the start of 2016." noted Research Team at Nomura.