(TNND) — A new survey of purchasing and supply executives nationwide shows economic activity in the manufacturing sector expanded in January for the first time in a year.
The Institute for Supply Management’s monthly report, the Manufacturing PMI, registered 52.6% in January, up 4.7 percentage points from December.
Fifty is the break-even level, so anything above 50 is an expansion, and anything below 50 is a contraction.
December’s Manufacturing PMI was 47.9%, and the 12-month average was 49.1%.
ISM noted improvements in all five subindexes that make up the PMI: new orders, production, employment, supplier deliveries and inventories.
Employment and inventories, however, remained in contraction territory.
Employment posted its 28th consecutive month of contraction.
The White House has touted an “American manufacturing boom” under President Donald Trump, pointing to trillions of dollars in new investments and exalting tariffs as a vital tool to rebuild American manufacturing.
So, is this the first sign of a domestic manufacturing rebound in 2026?
“The ISM index going up for one month after being down for so many months in a row, it’s good news,” business professor Jay Zagorsky said. “But most importantly, one data point, one month does not make a trend.”
Zagorsky, a professor with the Questrom School of Business at Boston University, said he remains “a little skeptical” that a manufacturing rebound is coming.
He said he cares most about whether more manufacturing means more American jobs. And, so far, that’s not doing much better.
ISM said just 14% of surveyed manufacturers said they increased employment in January.
Without more factory jobs, a manufacturing boom is “a partial victory,” Zagorsky said.
FILE – President Donald Trump (2R) tours the assembly line at the Ford River Rouge Complex on January 13, 2026, in Dearborn, Michigan. (Photo by Anna Moneymaker/Getty Images)
But both Zagorsky and Peter Mueser, a labor economist at the University of Missouri, said any turnaround in manufacturing activity and employment won’t be seen quickly.
Factories take years to permit, build, equip and staff with properly trained people.
“And so, what’s happening right now is relatively small stuff compared to what might be hoped for,” Mueser said.
Zagorsky said there’s a risk that companies will reshore manufacturing but do so largely with robots and artificial intelligence.
“Then we can be producing a lot of stuff here, and manufacturing employment could stay roughly stable where it is,” he said.
Of the six big manufacturing industries, only two – transportation equipment; and computer and electronic products – reported higher levels of employment in January.
For every comment on hiring in the ISM surveys, there were two on reducing head counts.
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