Tempe, AZ - The manufacturing sector grew in January for the 20th consecutive month, despite a drop in new orders and backlogs. Production reversed a three month slide, said the Institute for Supply Management.

Calling the inventory growth "significant," ISM chairman Norbert Ore said, the PMI reflects "continuing strength in manufacturing. However, manufacturers continue to struggle with prices, particularly for energy.

The PMI measure of economic activity fell 0.9 points sequentially from the revised December number, to 56.4%. New orders fell 6.1 points to 56.5%. However, production rose 1.1 points to 57.8%. Employment was up 4.8 points, to 58.1%.

Electronic Components and Equipment, and Industrial and Commercial Equipment and Computers were among the sectors reporting growth.