The latest U.S. manufacturing sector report found growth slowed more than expected in December, according to a closely watched index released on Friday.
The Institute for Supply Management (ISM) said its index of national factory activity decreased to 55.5 from 58.7 in November and 59 in October. The reading missed economists’ expectations of 57.6, according to a Reuters poll.
A reading above 50 indicates expansion in the manufacturing sector, while readings below 50 suggest contraction.
Manufacturing sector data have been less than positive this month, beginning with the New York Federal Reserve’s business activity index shrinking for the first time in nearly two years. Business conditions plummeted to -3.58 in December from 10.16 in November.
The Philadelphia Federal Reserve said that their regional survey of factory activity slowed significantly in December from growth seen in November. The diffusion index of current activity fell sharply by 16 points, down to 24.5 in December from a reading of 40.8 in November.
Finally, the Institute for Supply Management-Chicago Business Barometer showed regional Midwest business activity index tanked to 58.3, which is its lowest reading since July.
The dip in the latest survey also comes as Markit’s purchasing managers’ index also fell, indicating that activity in the factory sector has been negatively impacted by worries over global demand and a precipitous drop in oil prices. The decline dropped the ISM index to its lowest level since June.
The new orders index fell to 57.3 from 66, while the prices paid gauge was down dramatically to a reading of 38.5 from a previous 44.5, juxtaposed to expectations for a reading of 43.