Manufacturing Sector Strengthened by Burst of New Orders

Manufacturing expanded in December, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business.

The December PMI registered at 59.7 percent, up 1.5 percent from the November PMI reading of 58.2 percent. The Report On Business measures its data using the Purchasing Manager’s Index (PMI), which is an indicator of economic health in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding, while below 50 percent indicates that it is generally contracting.

The manufacturing sector grew for the 103rd consecutive month, as the New Orders Index registered 69.4 percent in December-a 5.4 percent increase compared to the 64 percent reported in November-to indicate new orders growth for the 16th consecutive month. This is the highest reading since January 2004, when the index registered 70.6 percent.

Comments from the professional panel of U.S. manufacturers reflect expanding business conditions, with new orders and production leading gains; employment expanding at a slower rate; order backlogs expanding at a faster rate; and export orders and imports continuing to grow in December. Supplier deliveries improved, and inventories continued to contract at a slower rate during the period. Price increases continued at a faster rate. The Customers’ Inventories Index declined and remains at low levels.

Of the 18 manufacturing industries, 16 reported growth, including (ranked in order): machinery; computer & electronic products; paper products; apparel, leather & allied products; printing & related support activities; primary metals; nonmetallic mineral products; petroleum & coal products; plastics & rubber products; miscellaneous manufacturing; food, beverage & tobacco products; furniture & related products; transportation equipment; chemical products; fabricated metal products; and electrical equipment, appliances & components.

Two industries reported contraction during the period: wood products; and textile mills.

Commodities Up in Price

Aluminum; caustic soda; copper; corrugate; electrical components; memory; polypropylene; rubber; steel; scrap steel; hot rolled steel; stainless steel; and titanium dioxide.

Commodities Down in Price


Commodities in Short Supply

Capacitors; electrical components; resistors; and titanium dioxide.

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