NEW YORK – The overall economy grew for the thirty-first straight time, while the manufacturing sector expanded for the twenty-ninth time, the Institute for Supply Management reported Tuesday.
According to the ISM’s monthly report on business, the ISM index climbed to 53.9 in December from 52.7 in November.
Economists polled by Thomson Reuters predicted the index would climb to 53.2.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
“The PMI registered 53.9 percent, an increase of 1.2 percentage points from November’s reading of 52.7 percent, indicating expansion in the manufacturing sector for the 29th consecutive month," said Bradley Holcomb, chair of the Institute of Supply Management's manufacturing business survey committee. “The New Orders Index increased 0.9 percentage point from November to 57.6 percent, reflecting the third consecutive month of growth after three months of contraction. Prices of raw materials continued to decrease for the third consecutive month, with the Prices Index registering 47.5 percent, which is 2.5 percentage points higher than the November reading of 45 percent. Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012 as reflected by the panel in this month’s survey.”
The closely watched prices paid index jumped to 47.5 from 45.0. The employment index was at 55.1, up from 51.8 the prior month.
The production index increased to 59.9 from 56.6, the new orders index grew to 57.6 from 56.7; the supplier deliveries index remained 49.9; the export orders index increased to 53.0 from 52.0; and the imports index rose to 54.0 from 49.0.
The inventories index slid to 47.1 from 48.3; the customers’ inventories index fell to 42.5 from 50.0; and backlog of orders climbed to 48.0 from 45.0.
Respondents’ comments included:
“Slow Q4 — lots of destocking and inventory reduction going on.” (Chemical Products)
“Business seems strong, but likely due to tax advantages of purchasing capital expense items.” (Machinery)
“Our business is stable with a very good outlook for 2012.” (Miscellaneous Manufacturing)
“Food prices seem to have peaked as demand is starting to wane.” (Food, Beverage & Tobacco Products)
“All auto demand remains strong.” (Fabricated Metal Products)
“Continued conservative hiring, with tight discretionary spending controls due to slower growth expectations for 2012, driven by Euro zone sovereign debt concerns and lack of viable U.S. legislative process through the 2012 election.” (Computer & Electronic Products)
“Business beginning to slow down (seasonal), but will finish with a very strong year.” (Plastics & Rubber Products)
“Business is steady today around the world.” (Transportation Equipment)
“Market has definitely slowed in the last month, and is expected to remain so this month.” (Wood Products)
