The Institute for Supply Management reported that the Manufacturing PMI dropped to 48.4% in December, 0.6 percentage points lower than the recorded 49% in November. As any number below 50% represents contraction, this is the second month the manufacturing sector has contracted since May 2020.
Don’t miss any content from Distribution Strategy Group. Join our list.
Here is the breakdown of the December PMI:
- New Orders Index: 45.2%, a 2 percentage point decrease month-over-month
- Production Index: 48.5%, a 3 percentage point decrease month-over-month
- Prices Index: 39.4%, a 3.6 percentage point decrease month-over-month
- Backlog of Orders Index: 41.4%, a 1.4 percentage point increase month-over-month
- Employment Index: 51.4%, a 3 percentage point increase month-over-month
- Supplier Deliveries Index: 45.1%, a 2.1 percentage point decrease month-over-month
- Inventories Index: 51.8%, a 0.9 percentage point increase month-over-month
- New Export Orders Index: 46.2%, a 2.2 percentage point decrease month-over-month
- Imports Index: 45.1%, a 1.5 percentage point decrease month-over-month
“The U.S. manufacturing sector again contracted, with the Manufacturing PMI at its lowest level since the coronavirus pandemic recovery began. With Business Survey Committee panelists reporting softening new order rates over the previous seven months, the December composite index reading reflects companies’ slowing their output,” Timothy R. Fiore, ISM Chairman, said.
December saw growth in two manufacturing industries, including:
- Primary Metals
- Petroleum & Coal Products
Wood Products, Fabricated Metal Products, Chemical Products, Paper Products, Plastics & Rubber Products, Electrical Equipment, Appliances & Components, Furniture & Related Products, Apparel, Leather & Allied Products, Computer & Electronic Products, Machinery, Food, Beverage & Tobacco Products, Transportation Equipment and Miscellaneous Manufacturing all reported a decrease in December compared to November.
