COVID-19 isn’t keeping American manufacturing down.

Released on Monday, Feb. 1, two separate studies based on feedback from purchasing managers indicated that the United States’ manufacturing sector expanded in January.

The IHS Markit manufacturing survey index increased from a reading of 57.1 in December to 59.2 in January. Last month’s reading was a record high for the survey, which began in 2007.

🇺🇸U.S. Manufacturing #PMI hit a record high of 59.2 in January, amid the fastest growth of both output and new orders for over six years. A further lengthening of delivery times also moved the headline figure up, and pushed input costs higher. Read more: https://t.co/fywTpyzsPa pic.twitter.com/tYEEoN36cb

— IHS Markit PMI™ (@IHSMarkitPMI) February 1, 2021

“U.S. manufacturing started 2021 on an encouragingly strong footing, with production and order books growing at the fastest rates for over six years,” said Chris Williamson, chief business economist at IHS Markit, a marketplace intelligence provider.

Williamson continued: “Demand from both domestic and export customers picked up sharply in January, buoyed by several driving forces. Consumer demand has improved while businesses are investing in more equipment and restocking warehouses, preparing for better times ahead as vaccine roll outs allow life to increasingly return to normal over the course of 2021.”

Meanwhile, the Institute for Supply Management’s purchasing managers’ index told of an expansion of manufacturing activity, clocking in at a reading 58.7. While that tally was down from December’s 60.5, it remained well above the 50 benchmark that must be surpassed to indicate growth in the sector.

“Of the six biggest manufacturing industries, five — chemical products, fabricated metal products, transportation equipment, food, beverage and tobacco products, and computer and electronic products — registered moderate to strong growth in January,” said Tim Fiore, chair of ISM’s Manufacturing Business Survey Committee. “Petroleum and coal products contracted.”

ISM’s Manufacturing PMI® registered 58.7 percent. Demand remains strong with New Orders registering 61.1 and low Customer Inventories. Listen to this 30 min discussion to get the details.https://t.co/o8IE3ghbRq

— Institute for Supply Management (@ism) February 1, 2021

It's not all good news for manufacturers, though. Williamson said the sector is encountering supply chain problems in relation to sourcing inputs from overseas due to shipping capacity issues – something the promo industry definitely knows something about. The shipping headaches are causing lead times to lengthen and costs to rise.

“These higher costs are being passed on to customers in the form of higher prices, which rose in January at the fastest rate since 2008,” said Williamson. “These price pressures should ease assuming supply conditions start to improve soon, but could result in some near-term uplift to consumer goods price inflation.”

Overall, however, the manufacturing sector appears to be headed in the right direction, with leaders like Fiore “feeling really bullish” about the year ahead. That means now could be a good time for promo products firms to begin having discussions with manufacturing clients about providing new solutions, as well as prospecting for new customers in the sector.