Manufacturing index jumps in January, employment growth key indicator

The economy is on the uptick and U.S. employment figures at the start of  the year set an encouraging pace for hiring this year. A large factor behind both is manufacturing. Production and employment in the industry have been key drivers behind the growth experienced by the national economy and the jobs market, a recent index detailed. As industrial activity rises and businesses expand, those with optimistic hiring intentions can turn to manufacturing recruiters for assistance in talent searches.

Highest level in nine months
Economic activity in manufacturing grew for the second consecutive month in January, the Institute for Supply Management (ISM) said. Its purchasing managers index (PMI) reading for January registered 53.1 percent, an increase of 2.9 percent from December 2011. A reading above 50 indicates expansion and January’s level is the highest since April 2012 when the index hit 54.1 percent.

ISM said among the 18 manufacturing sectors monitored by the index, 13 reported growth in January. Growing areas included plastics and rubber products, textile mills, furniture and related products, electrical equipment, transportation equipment and primary metals.

The rise in manufacturing exceeded the predictions of several economic analysts, who had pegged January growth at only 51 percent.

Employment growth among key factors
Among the many components of the index, employment was well up in January, continuing a long trend of growth that has heightened the value of manufacturing recruiters’ services in hiring plans. The employment index in the larger PMI grew to 54 percent in the first month of 2013, up from December’s reading of 51.9 percent. It marks the 40th consecutive month employment has made gains.

Half of the 18 sectors reported employment increases, with hiring in petroleum and coal products, plastics and rubber products, apparel and leather products and fabricated metal products leading the trend, ISM said. Only five of the reporting industries saw decreases in employment.

Inventories and new orders were also important drivers of the January increase. Inventories grew to 51 percent from a contracting 43 percent in December, an upward change of 8 percent, while new orders improved to 53.3 percent after December’s 49.7 percent.

Manufacturing gains have led businesses to have a positive perspective about their 2013 prospects, and hiring remains a goal for many employers. Firms that are looking to hire can work with manufacturing recruiters to boost their chances of landing top-level talent.