Business Intelligence

Manufacturing and Automation Growth Spurt Becomes a Trend

Feb. 4, 2025

The latest ISM PMI report shows new orders, production, employment and supplier deliveries in expansion. Meanwhile, industry analysts note that industrial automation is one of the sectors growing faster than the global economy.

David Greenfield, editor in chief

After 26 months of the Institute of Supply Management’s Purchasing Manager’s Index (PMI) holding below 50% (any number below 50% indicates contraction), the PMI number for January 2025 sat at 55.1%. This January number is three points higher than December’s seasonally adjusted figure. Plus, this latest number marks the third straight month that the PMI has registered about 50%.

Automation World partner publication Industry Week reports that Timothy Fiore, chair of the ISM’s manufacturing business survey committee, said: “Of the five subindexes that directly factor into the Manufacturing PMI, four (new orders, production, employment and supplier deliveries) were in expansion territory, compared to three in December.”

The latest ISM report shows eight industries reporting growth last month:

Chemical products
Electrical equipment, appliances and components
Machinery
Petroleum and coal products
Plastics and rubber products
Primary metals
Textile mills
Transportation equipment

More positive industrial news was reported by Barron’s, which noted that “manufacturers that sell all sorts of products to areas that are growing faster than the global economy — such as data centers, alternative energy production, industrial automation and new U.S. manufacturing projects as a result of onshoring — comprise hundreds of billions of dollars of the sector’s market value.”

According to Barron’s “analysts who cover industrials expect, in aggregate, the sector to enjoy just over 7% annual sales growth over the coming three years. Since cost increases for materials and wages aren’t expected to keep pace with revenue growth, profit margins can expand.”

One area of concern for those analysts is the recent news around Chinese AI (artificial intelligence) start-up DeepSeek. The Barron’s article noted that increased interest in DeepSeek “could force software companies to reduce their data-center investments, lowering the growth outlook for industrials’ data-center businesses.” However, because “most of the total revenue in the industrial sector isn’t from data centers, as these companies are highly diversified and attached to other growth trends” analysts still expect the sector to continue growing “over the long haul.”

More industry business insights from Automation World:

About the Author

David Greenfield, editor in chief | Editor in Chief

David Greenfield joined Automation World in June 2011. Bringing a wealth of industry knowledge and media experience to his position, David’s contributions can be found in AW’s print and online editions and custom projects. Earlier in his career, David was Editorial Director of Design News at UBM Electronics, and prior to joining UBM, he was Editorial Director of Control Engineering at Reed Business Information, where he also worked on Manufacturing Business Technology as Publisher.