Soft demand conditions, labor shortages lead to decline
US Manufacturing Purchasing Managers Index (PMI) in January dropped to its lowest level since October 2020, London-based global data provider IHS Markit said Tuesday in a report.
The index, which measures the activity level of purchasing managers in the manufacturing sector, fell 2.2 points to 55.5 in January, from 57.7 in December.
The market expectation for the index was for it to come in at 55.0.
A reading above 50 indicates expansion, below 50 shows contraction.
Soft demand conditions and labor shortages were cited as reasons behind the decline,according to the report.
“The Omicron outbreak has hit manufacturing hard, exacerbating existing headwinds by subduing demand, creating further supply chain issues and causing widespread staff shortages, often through absenteeism due to the surge in COVID-19 infections,” according to IHS Markit Chief Business Economist Chris Williamson.