Manufacturing Sector Expands in December - Modern Distribution Management

Manufacturing Sector Expands in December

PMI up 1.5 percent from November, and overall economy grew.

The manufacturing sector expanded in December, and the overall economy grew for the 91st consecutive month, according to supply executives in the latest Manufacturing ISM Report on Business. The December PMI was 54.7 percent, an increase of 1.5 percentage points from the November reading.

The New Orders Index registered 60.2 percent, an increase of 7.2 percentage points from the November reading of 53 percent. The Production Index registered 60.3 percent, 4.3 percentage points higher than the November reading of 56 percent. The Employment Index registered 53.1 percent, an increase of 0.8 percentage point from the November reading of 52.3 percent. Inventories of raw materials registered 47 percent, a decrease of 2 percentage points from the November reading of 49 percent. The Prices Index registered 65.5 percent in December, an increase of 11 percentage points from the November reading of 54.5 percent, indicating higher raw materials prices for the 10th consecutive month.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. The PMI, New Orders, Production and Employment Indexes all registered new highs for the year 2016, and the forward-looking comments from the panel are largely positive.

Of the 18 manufacturing industries, 11 are reporting growth in December in the following order: Petroleum & Coal Products; Primary Metals; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Paper Products; Machinery; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Fabricated Metal Products; and Chemical Products. The six industries reporting contraction in December – listed in order – are: Plastics & Rubber Products; Furniture & Related Products; Printing & Related Support Activities; Textile Mills; Nonmetallic Mineral Products; and Transportation Equipment.

For more information, visit www.ism.ws.

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