U.S. Manufacturing Growth Continued Early in 2021

U.S. manufacturing continued to recover in January, a bright spot for the U.S. economy as services companies continue to struggle with the coronavirus pandemic.

Two purchasing managers surveys on manufacturing activity released Monday pointed to continued growth, adding to evidence a pickup in demand for goods is helping U.S. factories.

The Institute for Supply Management’s manufacturing index ticked lower in January, to 58.7 from 60.5 in December, but remained in growth mode. A reading above 50 indicates activity is expanding across the manufacturing sector, while below 50 signals contraction.

While the pace of expansion slowed slightly last month,

Tim Fiore,

who oversees the ISM survey of factory purchasing and supply managers, said he is “feeling really bullish” about 2021, adding “the issue is how long it’s going to take to get the vaccine deployed” to ease strains in attracting and retaining labor at companies and facilities.

Meanwhile, a final January

IHS Markit

manufacturing survey for the U.S. released Monday rose to 59.2, from 57.1 in December. That was the index’s highest reading since the series began in 2007, as output and new orders rose.

“Manufacturing sector prospects for 2021 are upbeat, with solid consumer goods demand, inventory restocking, gradual business reopenings, and additional federal pandemic relief all set to keep activity on a firm footing,” said

Oren Klachkin,

an economist at Oxford Economics, in a note to clients.

U.S. industrial production also increased solidly in December, the Federal Reserve reported last month, citing manufacturing as a driving factor.

Globally, the manufacturing industry’s pace of expansion cooled slightly in several major economies in January as they continued to battle Covid-19 restrictions.

January surveys of factories in Europe showed manufacturing in the eurozone remained in expansionary territory for the seventh consecutive month, although at a slower pace.

The eurozone manufacturing purchasing managers index was 54.8 for January, down slightly on December’s 55.2, but still one of the highest figures seen over the past 2½ years, according to IHS Markit. U.K. manufacturing PMI was 54.1 in January, a three-month low.

China’s manufacturing activity eased in January, posting the slowest rate of expansion for seven months amid weak demand for exports and the domestic resurgence of Covid-19, according to a private survey of manufacturers.

The Caixin China purchasing managers index, which is weighted toward small, private manufacturers, dropped to 51.5 in January from 53.0 in December, Caixin Media Co. and researcher Markit said Monday.

Still, January’s reading was the ninth consecutive month that the Caixin PMI held above the 50 mark that separates expansion from contraction.

China’s official manufacturing PMI, which is focused more on large, state-owned companies, fell to 51.3 in January from 51.9 in December, according to data released by the National Bureau of Statistics on Sunday.

Write to Harriet Torry at harriet.torry@wsj.com

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