December Manufacturing ISM Report On Business Shows Continued Growth for Manufacturing, Production, and Employment

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected. Economic activity in the manufacturing sector expanded in December for the 19th consecutive month, and the overall economy grew for the 67th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in December as the PMI registered 55.5 percent, a decrease of 3.2 percentage points when compared to November's reading of 58.7 percent, indicating growth in manufacturing for the 19th consecutive month.

ISM's Production Index registered 58.8 percent in December, which is a decrease of 5.6 percentage points when compared to the 64.4 percent reported in November, indicating growth in production for the 10th consecutive month.

ISM's Employment Index registered 56.8 percent in December, which is an increase of 1.9 percentage points when compared to the 54.9 percent reported in November. This is the 18th consecutive month of growth in employment.

The delivery performance of suppliers to manufacturing organizations slowed in December at a faster rate as the Supplier Deliveries Index registered 59.3 percent. This month's reading is 2.5 percentage points higher than the 56.8 percent reported in November, and is the highest reading since March 2011 when the Supplier Deliveries Index registered 59.9 percent.

The Inventories Index registered 45.5 percent in December, which is 6 percentage points lower than the 51.5 percent registered in November, indicating raw materials inventories are contracting following four consecutive months of growth in inventories.

ISM's Backlog of Orders Index registered 52.5 percent in December, which is 2.5 percentage points lower than the 55 percent reported in November, indicating growth in order backlogs for the third consecutive month. Of the 87 percent of respondents who reported their backlog of orders, 25 percent reported greater backlogs, 20 percent reported smaller backlogs, and 55 percent reported no change from November.

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

Keywords: Automation, Manufacturing, Process Industries, Discrete Industries, Supply Management, PMI, ISM, ARC Advisory Group.