US ISM PMI has been in a contractionary phase for 15 months now.

The US ISM PMI was at 49.1 in January 2024 .  Let's take a look at what happened here.

Let's calculate 2 unknown sub-indices (Estimated new local orders & local raw materials) first.

* Estimated new local orders=New orders % change (+5.5) - New export order % change (-4.7) = +10.2%

* Estimated local raw materials=Inventories % change (+2.3) - Imports % change (+3.7) = -1.4%

The PMI improved by 2 to 49.1 because of the significant spike in new local orders (estimated at +10.2%).  The producers continue to let the customers' inventories to be depleted without increasing their production significantly.  We view the spike in new local orders as an aberration as this is unlikely to be repeated.  Furthermore, the PMI has been in a contractionary phase for 15 months now.