The overall economy grew for the seventy-ninth straight time, while the manufacturing sector contracted for the second month in a row, the Institute for Supply Management reported Monday.
According to the ISM's monthly report on business, the ISM index decreased to 48.2 in December from 48.6 in November.
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 prices paid index slid to 33.5 from 35.5. The employment index fell to 48.1 from 51.3.
The production index climbed to 49.8 from 49.2, the new orders index grew to 49.2 from 48.9; the supplier deliveries index dipped to 50.3 from 50.6; the export orders index rose to 51.0 from 47.5; and the imports index fell to 45.5 from 49.0.
The inventories index gained to 43.5 from 43.0; the customers' inventories index rose to 51.5 from 50.5; and backlog of orders dipped to 41.0 from 43.0.
Respondents' comments included:
- "Low oil prices are negatively impacting oil and gas exploration activities. Low oil prices are generally positive for the petrochemical industry." (Petroleum & Coal Products)
- "Month-over-month sales were down, profitability up." (Chemical Products)
- "December revenue is flat compared to last month." (Computer & Electronic Products)
- "Still very slow due to oil prices." (Fabricated Metal Products)
- "Deflation in many commodities is helping with product savings. Sales are strong with a backlog." (Transportation Equipment)
- "Targeting reduced inventories for raw materials by year-end." (Textile Mills)
- "Sales have dropped and continue to be soft. This is resulting in [a] reduction in workforce and furloughs." (Apparel, Leather & Allied Products)
- "Medical device business continues to be strong, both in the U.S. and abroad." (Miscellaneous Manufacturing)
- "Business is going well. Low fuel prices keep full size SUV and truck sales at high volumes." (Plastics & Rubber Products)
- "Customers are tightening their inventories for year-end, impacting our sales and shipments." (Food, Beverage & Tobacco Products)
