The Institute for Supply Management’s (ISM) primary manufacturing index (PMI) improved to 35.6 in January after a 28 year low of 32.9 in December. Last month’s number beat expectations, since the survey respondents actually anticipated the PMI to drop to 32.6. Although some would like to take this as a sign that the manufacturing sector may have bottomed out in December, it’s important to note that anything under 50 still indicates a contraction in manufacturing. So, the “good news” is that manufacturing activity, while still in decline, isn’t shrinking as fast as everyone thought it was.

Of course, one month of improving numbers does not a recovery make. Yesterday, I asked Pat Furey, Supply Excellence contributor and leader of our US based category management team, if the January PMI indicates that “buyer’s market” conditions may be coming to a close. Pat’s take:

“It’s too early to jump to conclusions on this. The consensus is not to read too much into this number. I still believe people need to move (on sourcing opportunities), but we are not in for a quick recovery.”

In a post last week on the metals markets, Mike Petro also urged companies not to wait too long in the hopes of timing their sourcing projects with the market’s rock bottom. And when you consider that many smart buying organizations are looking to indexed pricing and adjustment clauses on many direct materials in order share pricing risks between the themselves and their suppliers, trying to time the market’s trough may actually be the riskier strategy.

On February 19th, Mike Petro will be joined by Sidney Hill, Jr., Manufacturing Business Technology’s Executive Editor, and Naseem A. Malik, the Director of Global Sourcing of Electrical Components at Terex, for a Manufacturing Virtual Town Hall. The insights this roundtable can provide should prove helpful to sourcing professionals in manufacturing or other industries with significant spend on raw materials. But they have also asked for input and/or questions from the attendees. So, I encourage you to register and provide your suggested topics or questions here.

Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.