NEW YORK - The overall economy grew for the twentieth straight time, while the manufacturing sector expanded for the seventeenth time, the Institute for Supply Management reported this morning.
According to the ISM’s monthly report on business, the ISM index crept to 57.0 in December from 56.6 in November.
Economists polled by Thomson Reuters predicted the index would rise to 56.9.
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 manufacturing sector continued its growth trend as indicated by this month’s report," said Norbert J. Ore, chair of the Institute of Supply Management's manufacturing business survey committee. “We saw significant recovery for much of the U.S. manufacturing sector in 2010. The recovery centered on strength in autos, metals, food, machinery, computers and electronics, while those industries tied primarily to housing continue to struggle. Additionally, manufacturers that export have benefitted from both global demand and the weaker dollar. December’s strong readings in new orders and production, combined with positive comments from the panel, should create momentum as we go into the first quarter of 2011.”
The closely watched prices paid index grew to 72.5 from 69.5. The employment index was at 55.7, off from 57.5 the prior month.
The production index increased to 60.7 from 55.0, the new orders index rose to 60.9 from 56.6; the supplier deliveries index dipped to 55.9 from 57.2; the export orders index decreased to 54.5 from 57.0; and the imports index slid to 50.5 from 53.0.
The inventories index decreased to 51.8 from 56.7; the customers’ inventories index fell to 40.0 from 45.5; and backlog of orders increased to 47.0 from 46.0.
Respondents’ comments included:
“Company outlook looks positive into 2011. Solid revenue growth across the globe driven by strong volume in Q3 and Q4 2010.” (Chemical Products)
“We continue to see strong demand for our product in Europe and Asia.” (Electrical Equipment, Appliances & Components)
“The end of the year is surprisingly busy.” (Computer & Electronic Products)
“Business remains slow, while vendors clamor for increases that should have no foundation in economics.” (Nonmetallic Mineral Products)
“Strong pressure still exists on raw material prices in almost every area. It is unclear as to whether they can get them.” (Plastics & Rubber Products)
