US manufacturing activity expands for first time in 27 months

US manufacturing activity grew in January, marking the first expansion after 26 consecutive months of contraction, driven by increases in new orders, production, and both imports and exports. This growth was supported by stronger customer demand and improved economic confidence.

According to data from the Institute for Supply Management released on Monday, the manufacturing Purchasing Managers' Index (PMI) rose to 50.9 points in January, up from 49.2 points in December, beating expectations to remain unchanged.

The new orders index grew for the third consecutive month after seven months of contraction, reaching 55.1 points in January, a three-point rise from December. Meanwhile, the production index returned to growth after eight months of contraction, rising 2.6 points to 52.5.

The final reading in a survey by Standard & Poor's Global showed that the manufacturing PMI rose in January to 51.2 points from December's reading of 49.4 points, which is higher than the preliminary reading of 50.1 points.