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HomeNewsEconomyManufacturing ISM Report On Business Starts New Year Deeper in Contraction

Manufacturing ISM Report On Business Starts New Year Deeper in Contraction


National, and All Regional Manufacturing Gauges in Contraction


The Institute for Supply Management’s Manufacturing Report On Business Survey. (Photo: REUTERS)

The Institute for Supply Management (ISM) Report On Business activity fell deeper into contraction to 48.2 in December from 48.6 the month prior, missing forecasts. While economists expected a slight tick up to 49 for the month, the gauge matches PPD Business expectations as previously reported last week.

“As was the case in November, 10 out of 18 manufacturing industries reported contraction in December,” said Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. “Contraction in new orders, production, employment and raw materials inventories accounted for the overall softness in December.”

The reading, which fell deeper into contraction for the second consecutive month, was the lowest since June 2009. Readings above 50 point to expansion while those below indicate contraction.

Holcomb added:

The New Orders Index registered 49.2 percent, an increase of 0.3 percentage point from the reading of 48.9 percent in November. The Production Index registered 49.8 percent, 0.6 percentage point higher than the November reading of 49.2 percent. The Employment Index registered 48.1 percent, 3.2 percentage points below the November reading of 51.3 percent. The Prices Index registered 33.5 percent, a decrease of 2 percentage points from the November reading of 35.5 percent, indicating lower raw materials prices for the 14th consecutive month. The New Export Orders Index registered 51 percent, up 3.5 percentage points from the November reading of 47.5 percent and the Imports Index registered 45.5 percent, down 3.5 percentage points from the November reading of 49 percent.

Of the 18 manufacturing industries, only six reported growth in December in the following order: Printing & Related Support Activities; Textile Mills; Paper Products; Miscellaneous Manufacturing; Chemical Products; and Food, Beverage & Tobacco Products. The 10 industries reporting contraction in December — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Machinery; Primary Metals; Fabricated Metal Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Wood Products; and Nonmetallic Mineral Products.

Index Series
Direction Rate
PMI® 48.2 48.6 -0.4 Contracting Faster 2
New Orders 49.2 48.9 +0.3 Contracting Slower 2
Production 49.8 49.2 +0.6 Contracting Slower 2
Employment 48.1 51.3 -3.2 Contracting From Growing 1
Supplier Deliveries 50.3 50.6 -0.3 Slowing Slower 5
Inventories 43.5 43.0 +0.5 Contracting Slower 6
Customers’ Inventories 51.5 50.5 +1.0 Too High Faster 5
Prices 33.5 35.5 -2.0 Decreasing Faster 14
Backlog of Orders 41.0 43.0 -2.0 Contracting Faster 7
Exports 51.0 47.5 +3.5 Growing From
Imports 45.5 49.0 -3.5 Contracting Faster 3
OVERALL ECONOMY Growing Slower 79
Manufacturing Sector Contracting Faster 2

Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.

*Number of months moving in current direction.

Written by

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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