Buckle Up, it’s going to be a bumpy ride to economic recovery—but, hopefully, a relatively short one.
Economic activity in manufacturing contracted in January for the third consecutive month following 28 months of growth, according to the Institute for Supply Management (ISM). The group’s purchasing manager’s index (PMI) fell to 47.4 percent, which was down from December’s 48.4 percent (anything below 50 indicates contraction). The drop put PMI, which surveys executives in 18 industries, at its lowest level since the recovery from the coronavirus pandemic began in May 2020.
ISM’s New Orders Index also continued to contract at 42.5 percent in January vs. the seasonally adjusted 45.1 percent reported in December. The Production Index was also down, slipping 0.6 points to 48 percent.
The declines, which had been expected, were attributed to a variety of factors. Consumer hesitancy weakened sales across domestic and export markets, while the rise of input costs and output charges steepened as pricing pressures intensified. At the same time, inventory reduction efforts accelerated.
“There is clear evidence of demand softening,” declared Timothy Fiore, chair of ISM’s Manufacturing Business Survey Committee. “We knew the first half (of 2023) would be a bit of a struggle,” he said, warning: “I don’t know if we’ve hit bottom yet.”But there are also some positive signs. And the outlook for a soft landing and rebound in the second half of 2023 continues to look good.
ISM’s Employment Index remained in positive territory at 50.6 percent in January. And the Labor Department showed the U.S. added 517,000 jobs for the month (considerably outpacing expectations), while unemployment fell to 3.4 percent.
As a result, some analysts have suggested the downturn could be the first U.S. recession without any material job losses. “It appears companies are trying to retain their workforces through half one in anticipation of a stronger half two,” ISM’s Fiore added.
The global outlook also is improving. Europe’s PMI grew to a five-month high of 48.8 in January, according to S&P Global. And China’s factory activity expanded for the first time since September to 50.1 in January.
The industry’s resiliency is evident throughout this issue of Manufacturing Engineering. This includes feature articles on the latest advances in traditional manufacturing systems, such as dies and molds, holemaking, and balancing. Meanwhile, another article takes a look at the resurgence of remanufacturing with the growing global focus on sustainability and creating a circular economy.
At the other end of the spectrum, our Voices AMplified series profiles two innovators—Carolyn Seepersad and Ahmed El Desouky—who are changing the world, layer by layer, through additive manufacturing (AM)—including a 3D-printed version of the iconic University of Texas Longhorn logo.
We hope you enjoy the issue!
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