US manufacturing activity expands for first time in 27 months

US manufacturing activity expanded last month after contracting for 26 successive months, with new orders and production rising, imports and exports increasing, backed by improved customer demand and stronger confidence in the economy.

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 month after seven months of contraction, recording 55.1 points last month, up three points from December, while the production index returned to expansion after eight months of contraction, recording 52.5 points (+2.6 points).

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.