the us manufacturing sector lost further momentum in january starting the year on a weak footing as activity was hit by stillhigh prices and sluggish demand data from a purchasing managers survey showed wednesday the institute for supply management said its index of us manufacturing activity decreased to 474 in january from 484 in december this marks the fifth consecutive decline in the index and the third month it comes in below the 500 threshold that separates expansion from contraction economists polled by the wall street journal expected the index at 480 us manufacturers have struggled in recent months as demand for goods weakened due to higher interest rates and consumers switching spending toward services high inventories and subdued global demand also are weighing on the sector industrial production has fallen in six of the past eight months the largest declines being november and december januarys survey data reflects manufacturers are slowing output to better match demand in the first half of 2023 and prepare for growth in the second half of the year said timothy fiore chairman of the ism manufacturing business survey committee the production index fell to 480 in january from 486 in december signaling that output contracted for a second consecutive month the new orders index declined to 425 from 451 a sign of deteriorating demand conditions the outlook for the first half of 2023 looks very soft said one respondent from the fabricated metal products sector demand for our products has taken a sharp downward turn the employment index decreased to 506 from 508 suggesting broadly stable job levels panelists companies are indicating that they are not going to substantially reduce head counts as they are positive about the second half of the year mr fiore said the supplier deliveries index rose slightly to 456 from 451 but continued to suggest vendor lead times are shortening as supplychains normalize and demand weakens inflation pressures ticked up in january according to the survey the prices index edged up to 445 from 394 suggesting that prices at factory gates continued to fall albeit at a softer pace than the previous month in january nine industries reported paying lower prices for raw materials while four said prices increased the report said