Manufacturing activity in
The decline in activity was registered in declines in production, capacity utilization, employment, new orders and deliveries. Stocks grew modestly while exports remained stable.
Input cost price growth remained strong in January, while selling price growth continued to rise. Growth in wages eased for the second consecutive month.
Highlighting important factors driving weaker activity in January, manufacturers cited: import competition; lack of skilled labor; shortages of raw materials; uncertainties due to concerns over global financial markets and growth; and weather conditions. Seasonal factors in regard to factory shutdowns over the holiday break also contributed to weaker production.
Activity fell in
Sectors
Seasonally adjusted, activity expanded in five sectors in January, compared with nine in December 2007. Growth was solid but generally easing in the construction materials; basic metal products; fabricated metal products; and textiles sectors. Growth improved in the transport equipment sector in line with solid vehicle demand over recent quarters. In contrast, activity fell in the food & beverages (the largest contributor to overall weaker activity); clothing & footwear; paper, printing & publishing; machinery & equipment; and wood, wood products & furniture sectors.
The chemicals, petroleum & coal products and miscellaneous manufactures sectors saw activity remain basically stable in January.
Production and capacity
Seasonally adjusted, the production sub-index fell 10.0 points to 48.4, the first contraction since May 2006. Unadjusted, the number of sectors reporting higher production was two (down from nine in the previous month).
Production grew modestly in the fabricated metal products and transport equipment sectors.
The strongest production declines were experienced in the textiles; food & beverages; wood, wood products & furniture; and miscellaneous manufactures sectors. Production also declined in the clothing & footwear; paper, printing & publishing; chemicals, petroleum & coal products; construction materials; basic metal products and; machinery & equipment sectors.
In line with seasonal closures, capacity utilization fell to 74.7 percent in January.
New orders
The new orders sub-index fell by 9.7 points to 49.2 in January, after 22 quarters of successive growth.
No sectors reported new order increases (unadjusted), with orders falling in 10 sectors and remaining stable in two.
The largest declines in new orders were experienced in the wood, wood products & furniture; textiles; machinery & equipment; and miscellaneous manufactures sectors. Orders also fell in the food & beverages; clothing & footwear; paper, printing & publishing; chemicals, petroleum & coal products; construction materials; and transport equipment sectors.
Orders were stable in the basic metal products and fabricated metal products sectors.
Employment and average wages
Seasonally adjusted, the employment sub-index fell 5.3 points to 49.9, so that overall employment remained basically stable in January. In unadjusted terms, employment grew in two sectors, fell in five and remained stable in five.
Employment grew in the clothing & footwear and basic metal products sectors. Employment fell in the food & beverages; textiles; transport equipment; machinery & equipment; and miscellaneous manufactures sectors. It remained stable in the wood, wood products & furniture; paper, printing & publishing; chemicals, petroleum & coal products; construction materials; and fabricated metal products sectors.
In January, average wages growth eased for the second consecutive quarter to 58.9 points compared to 63.8 in December.
Finished Stocks
The inventories sub-index rose 0.9 points to 52.9 (seasonally adjusted). Unadjusted, the number of sectors reporting increases was two, down from eight in December. Stocks fell in four sectors and were stable in six.
Inventories rose solidly in the construction materials and basic metal products sectors.
Stocks remained stable in the wood, wood products & furniture; paper, printing & publishing; food & beverages; textiles; transport equipment; and miscellaneous manufactures sectors.
Stocks fell in the machinery & equipment; fabricated metal products; clothing & footwear; and chemicals, petroleum & coal products sectors.
Deliveries, input costs, output prices
Seasonally adjusted, the supplier deliveries sub-index fell by 13.4 points, to 47.3. Unadjusted, three sectors experienced higher deliveries, one reported no change and eight sectors saw declines.
Deliveries rose solidly in the transport equipment; basic metal products; and miscellaneous manufactures sectors. The food & beverages; clothing & footwear; and construction materials sectors posted significant falls in deliveries. The machinery & equipment; fabricated metal products; chemicals, petroleum & coal products; paper, printing & publishing; and wood, wood products & furniture sectors also saw a fall in deliveries. The textiles sector saw stable deliveries.
The raw material cost index rose 9.6 points to 80.3 (seasonally adjusted). In unadjusted terms, costs rose in all 12 sectors. The strongest gains were in textiles; basic metal products; and construction materials.
Selling price rises rose again on average across manufacturing. The most significant price gains were in food & beverages; construction materials; and basic metal products. Price falls were recorded in textiles; clothing & footwear; and miscellaneous manufactures.
