TEMPE, Ariz. — Economic activity in the manufacturing sector contracted in December for the ninth consecutive month and the 25th time in the last 26 months, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee:

“The Manufacturing PMI registered 49.3 percent in December, 0.9 percentage points higher compared to the 48.4 percent recorded in November. The overall economy continued in expansion for the 56th month after one month of contraction in April 2020. (A Manufacturing PMI above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.)"

The seven manufacturing industries reporting growth in December — listed in order — are: Primary Metals; Electrical Equipment, Appliances & Components; Wood Products; Furniture & Related Products; Paper Products; Miscellaneous Manufacturing; and Plastics & Rubber Products. The seven industries reporting contraction in December — in the following order — are: Textile Mills; Fabricated Metal Products; Printing & Related Support Activities; Machinery; Chemical Products; Transportation Equipment; and Nonmetallic Mineral Products.

Wood products and furniture & related products reported growth in inventories and imports, and reported lower backlogs. Wood products reported higher customer inventories and production, while furniture products reported lower employment rates and slower supplier deliveries

Fiore continues, “U.S. manufacturing activity contracted again in December, but at a slower rate compared to November. Demand showed signs of improving, while output stabilized and inputs stayed accommodative. Demand analysis includes: the (1) New Orders Index remaining in expansion territory, (2) New Export Orders Index increasing (up 1.3 percentage points and now ‘unchanged’), (3) Backlog of Orders Index slowing its rate of decline but continuing in contraction territory, and (4) Customers’ Inventories Index dropping into ‘too low’ territory. 

• Output (measured by the Production and Employment indexes) was positive; factory output stabilized compared to November, indicating that panelists’ companies are executing to plan. Employment contracted as final head-count adjustments were likely taken to prepare for 2025. 
• Inputs — defined as supplier deliveries, inventories, prices and imports — generally continued to accommodate future demand growth, with inventories and imports improving marginally (though remaining in contraction), prices increasing and supplier deliveries marginally slowing.

Demand improved, production execution met November’s performance (and companies’ plans), de-staffing continued (but should end soon), and price growth was marginal."

To read teh full report, visit ismworld.org/.