The manufacturing sector contracted in December for the 14th consecutive month, according to the nation’s supply executives in the latest Manufacturing ISM Report on Business.
The Manufacturing PMI® registered 47.4% in December, up 0.7 percentage point from the 46.7% recorded in November.
Don’t miss any content from Distribution Strategy Group. Join our list.
The report was issued by Timothy R. Fiore, CPSM, C.P.M., Chairman of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.
The overall economy continued to contract for a third month after one month of weak expansion preceded by nine months of contraction. A Manufacturing PMI® above 48.7%, over a period of time, generally indicates an expansion of the overall economy.
The New Orders Index remained in contraction territory at 47.1%, 1.2 percentage points lower than the figure of 48.3% recorded in November. The Production Index reading of 50.3% is a 1.8-percentage point increase.
The Prices Index registered 45.2%, down 4.7 percentage points. The Backlog of Orders Index registered 45.3%, 6 percentage points higher than November. The Employment Index registered 48.1%, up 2.3 percentage points.
The Supplier Deliveries Index figure of 47% is 0.8 percentage point higher. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50% indicates slower deliveries, which is typical as the economy improves and customer demand increases.)
The Inventories Index decreased by 0.5 percentage point to 44.3%. The New Export Orders Index reading of 49.9% is 3.9 percentage points higher. The Imports Index remained in contraction territory, registering 46.4%, 0.2 percentage point higher.
None of the six biggest manufacturing industries registered growth in December.
“Demand remains soft, and production execution is stable compared to November, as panelists’ companies continue to manage outputs, material inputs and labor costs,” said Fiore.
The only manufacturing industry to report growth in December is Primary Metals. The 16 industries reporting contraction in December — in the following order — are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; Textile Mills; Petroleum & Coal Products; Paper Products; Wood Products; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Furniture & Related Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Chemical Products.
