The Institute for Supply Management (ISM) announced Monday that economic activity in the manufacturing sector expanded in December for the 17th consecutive month, and the overall economy grew for the 20th consecutive month.
Manufacturing continued to grow in December as the PMI registered 57 percent, an increase of 0.4 percent when compared to November's reading of 56.6 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 20th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 17th consecutive month.
ISM's New Orders Index registered 60.9 percent in December, which is an increase of 4.3 percent compared to the 56.6 percent reported in November. This is the 18th consecutive month of growth in the New Orders Index. ISM's Production Index registered 60.7 percent in December, which is an increase of 5.7 percent from the November reading of 55 percent. This is the 19th consecutive month the Production Index has registered above 50 percent.
Out of the 18 manufacturing industries, 10 reported growth in new orders, while nine reported growth in production in December, including primary metals, machinery, fabricated metal products, and transportation equipment.
ISM's Employment Index registered 55.7 percent in December, which is 1.8 percent lower than the 57.5 percent reported in November. This is the 13th consecutive month of growth in manufacturing employment. December's increase was driven by higher employment levels in the primary metals and fabricated metal products sectors.
The delivery performance of suppliers to manufacturing organizations was slower in December as the Supplier Deliveries Index registered 55.9 percent, which is 1.3 percentage points lower than the 57.2 percent registered in November. This is the 19th consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.
The eight industries reporting slower supplier deliveries in December - listed in order - are: Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Machinery; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Chemical Products; and Transportation Equipment. The two industries reporting faster deliveries in December are: Printing & Related Support Activities; and Computer & Electronic Products.
Manufacturers' inventories grew for the sixth consecutive month in December, but at a slower rate as the Inventories Index registered 51.8 percent. The index is 4.9 percent lower than the 56.7 percent reported in November.
The ISM Prices Index registered 72.5 percent in December, 3 percent higher than the 69.5 percent reported in November. This is the 18th consecutive month the Prices Index has registered above 50 percent. While 48 percent of respondents reported paying higher prices and 3 percent reported paying lower prices, 49 percent of supply executives reported paying the same prices as in November. A Prices Index above 49.3 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
ISM's New Export Orders Index registered 54.5 percent in December, which is 2.5 percent lower than the 57 percent reported in November. This is the 18th consecutive month of growth in the New Export Orders Index.
The eight industries reporting growth in new export orders in December - listed in order - are: Apparel, Leather & Allied Products; Primary Metals; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Machinery; Transportation Equipment; and Chemical Products.
Imports of materials by manufacturers continued to expand in December as the Imports Index registered 50.5 percent, which is 2.5 percent lower than the 53 percent reported in November. This is the 16th consecutive month of growth in imports.