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January purchasing index up
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February 1, 1999: 10:59 a.m. ET
But index remains below pivotal 50 mark; Dec. construction spending soars
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NEW YORK (CNNfn) - Manufacturing activity came in slightly ahead of expectations last month, but continued its losing streak as emerging market pressures bear down on the U.S. economy, the National Association of Purchasing Management reports.
The purchasing index, a key barometer of economic health, rose to 49.5 in January from a revised 45.3 the month before. Economists had expected the index for the most recent month to reach 45.5.
Even so, a growth rate below 50 indicates the sector is contracting. Anything 50 or higher generally points to sector expansion.
The index last month remained below the 50 mark for the eighth consecutive month.
The NAPM data are based on replies to survey questionnaires by purchasing executives in more than 350 industrial companies.
At the same time, construction spending rose 1.7 percent in December, beating estimates by a wide margin. The index was forecast to grow just 0.5 percent. In November, spending was up 1 percent.
Harvinder Kalirai, an economist with IDEA, said the strength of construction spending is in line with the strength of U.S. housing starts of late. He noted that analysts have been underestimating the growth in home construction.
Earlier Monday, the Commerce Department reported robust personal spending, a dwindling savings rate and slightly lower than expected income growth.
The bond market reacted negatively to the data, with the 30-year Treasury bond down 14/31 for a yield of 5.11 percent.
According to NAPM, the inventory index rose to 42.3 last month, compared with 42.3 in December.
The new orders index also rose to 51.3 from 46 in December, and the prices index climbed to 32.5 from 31.1 in December. 
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