The Institute for Supply Management’s purchasing managers index rose in January to 58.4, its highest level since August 2004. Index values above 50 indicate an expanding manufacturing sector, while values below 50 indicate contraction. The index is a composite of nine other indexes including new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export orders and import orders. The production index increased to 66.2, its highest level since April 2004 while new orders, a leading indicator of production, rose to 65.9. Inventories remained below 50, a sign that production activity will remain strong for the next few months as manufacturers replenish theirdepleted inventories. A recovery in the manufacturing sector will boost demand for manufacturing properties, and it translates into more goods flowing through corporate supply chains, which will support demand for warehouse/distribution space.
Source: Institute for Supply Management, Grubb & Ellis