The U.S. manufacturing industry kept up the momentum it built in December, and employers in the U.S. manufacturing sector brought on new workers as orders jumped, according to a new report from the Institute for Supply Management (ISM).
The ISM's index of national factory activity jumped to 53.1 from 50.2 in December, further extending the sector's distance between the 50-point line, which denotes expansion from contraction. This also marked the second consecutive month of expansion for the industry.
"Manufacturing is starting out the year on a positive note, with all five of the PMI's component indexes — new orders, production, employment, supplier deliveries and inventories — registering above 50 percent in January," said Bradley J. Holcomb, chair of ISM.
Manufacturers continued to add new jobs in January, with the employment index rising to 54 from 51.9 in December.
According to Reuters, the reading came in above economists' expectations of 50.6, and was the highest since April 2012. What's more, the data indicate the manufacturing industry - a pillar for the rest of the economy that saw growth slow in 2012 - may be making up for the ground it lost last year.
This rise in employment reflects the continuing trend among goods producers, in which they are bringing on temporary labor to accommodate changing production cycles and schedules. While some firms have reported such workers have actually sent costs higher, those that have adopted innovative labor solutions, such as cost per unit labor pricing, have experienced less turnover and lower hiring costs.
Manufacturing firms reported new orders were much higher, also, with the corresponding index rising to 53.3 last month from 49.7 in December.
A report released by the Federal Reserve Bank of Dallas also noted that Texas' manufacturing activity jumped sharply last month. The state's production index rose from 3.5 to 12.9 in January - a precipitous rise that suggests the sector is expanding at a faster rate.