January ISM Manufacturing Survey Shows First Expansion in 12 Months; S&P Data Indicate Growth Acceleration

12:46 PM EST, 02/02/2026 (MT Newswires) -- The US manufacturing sector expanded in January amid strong production, while price pressures intensified, two separate surveys showed Monday, with Institute for Supply Management data indicating expansion for the first time in a year and an S&P Global (SPGI) report pointing to faster growth sequentially.

The ISM purchasing managers' index rose to 52.6 last month from 47.9 in December. The consensus was for a 48.5 print in a survey compiled by Bloomberg. A reading above 50 indicates the manufacturing sector is generally expanding, while a reading below that shows contraction.

"The ISM manufacturing index blew passed expectations at the start of the year, registering the fastest pace of expansion in over three years," Oxford Economics Senior Economist Matthew Martin said in remarks e-mailed to MT Newswires. "Strong new orders, a rising backlog of orders, and low customer inventories suggest there will be continued momentum in the sector."

The new orders index climbed to 57.1 from 47.4 sequentially in January, while production increased to 55.9 from 50.7. Both readings were their highest since February 2022, according to the ISM. The employment index rose to 48.1 from 44.8, its 28th consecutive month of contraction, while the prices gauge edged up to 59 from 58.5.

"Although these are positive signs for the start of the year, they are tempered by commentary citing that January is a reorder month after the holidays, and some buying appears to be to get ahead of expected price increases due to ongoing tariff issues," said Susan Spence, chair of the ISM's manufacturing business survey committee.

Oxford Economics said it expects that factors such as a fiscal boost from the One Big Beautiful Bill Act, interest rate relief, and the continued boost from artificial intelligence investment will support "more sustained expansion" in the manufacturing sector this year.

Separately, S&P Global (SPGI) said its manufacturing PMI rose to 52.4 in January from 51.8 in the month prior. Production increased at the sharpest pace since August and the joint-strongest since May 2022, according to the data provider.

"Production growth consequently significantly outpaced that of new orders at the start of the year, resulting in a further accumulation of unsold warehouse inventory," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. Tariffs drove up input costs to a "greater degree" and limited demand gains, especially from international markets, S&P Global (SPGI) said.

Employment saw a "modest" rise amid expectations of higher output and increased present operational requirements, the report showed.

"While just below trend, business growth expectations for the year ahead are, however, holding up as firms anticipate improving demand, thanks in part to lower interest rates, reduced import competition due to tariffs, and more government support," Williamson said. "However, political uncertainty remains a key drag on business sentiment."

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