Economic activity in the manufacturing sector expanded in December following one month of contraction, and the overall U.S. economy grew for the 43rd consecutive month, according to the latest ISM report on manufacturing.
The PMI index registered 50.7 percent, an increase of 1.2 percentage points from November's reading of 49.5 percent, indicating expansion in manufacturing for only the third time in the last seven months. The New Orders Index remained at 50.3 percent, the same rate as in November, indicating growth in new orders for the fourth consecutive month. The Production Index registered 52.6 percent, a decrease of 1.1 percentage points, indicating growth in production for the third consecutive month. The Employment Index registered 52.7 percent, an increase of 4.3 percentage points, indicating a resumption of growth in employment following only one month of contraction since September 2009. Both the Exports and Imports Indexes registered 51.5 percent, returning both indexes to growth territory following consecutive periods of contraction of six and four months, respectively.
The Inventories Index registered 43 percent in December, which is 2 percentage points lower than the 45 percent reported in November. This month's reading indicates that respondents are reporting inventories contracting in December, and at a faster rate than in November. The Inventories Index is at its lowest point since December 2009. The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
Of the 18 manufacturing industries, seven are reporting growth in December in the following order: furniture and related products; paper products; petroleum and coal products; wood products; primary metals; computer and electronic products; and food, beverage and tobacco products. The nine industries reporting contraction in December — listed in order — are: nonmetallic mineral products; chemical products; miscellaneous manufacturing; plastics and rubber products; fabricated metal products; transportation equipment; machinery; electrical equipment, appliances and components; and apparel, leather and allied products.