ISM Report: Manufacturing PMI Grows 0.9 Points in December, Continues Contraction
The ISM (Institute for Supply Management) Manufacturing PMI contracted for the ninth consecutive month with a December reading of 49.3%. When compared to November’s reading of 48.4%, the 0.9 percentage point increase indicates contraction at a slower rate.
“Of the five subindexes that directly factor into the Manufacturing PMI, three (new orders, production and supplier deliveries) were in expansion territory, compared to only one in November,” says Timothy Fiore, chair of the ISM’s manufacturing business survey committee.
2.1 points higher than November’s reading of 50.4%, the new orders index grew at a faster rate in December, registering 52.5%. Anything lower than 50% represents contraction.
The production index entered expansion territory with a reading of 50.3%, 3.5 points higher than the previous month. The employment index contracted at a faster rate, falling 2.8 points to 45.3% in December.
Seven industries reported growth in December:
- Primary metals
- Electrical equipment, appliances & components
- Wood products
- Furniture & related products
- Paper products
- Miscellaneous manufacturing
- Plastics & rubber products
“None of the six largest manufacturing industries expanded in December, down from two in November,” says Fiore.
The comments of the survey highlight differing conditions based on the industry.
“We are seeing a softening in sales. This is concerning as it’s our peak season,” writes an executive in the food, beverage & tobacco products industry. In addition, a respondent from the fabricated metal products industry reports “order levels well below forecast projections.”
On the other hand, executives from other industries, including electrical equipment, appliances & components and plastics & rubber products, are reporting an increase in orders.
