Economic activity in the manufacturing sector expanded in December, following one month of contraction, and the overall economy grew for the 43rd consecutive month, according to the latest Manufacturing ISM Report on Business.
The Purchasing Managers Index (PMI) registered 50.7%, an increase of 1.2 percentage points from November’s reading of 49.5%, indicating expansion in manufacturing for only the third time in the last seven months. This month’s PMI reading moved manufacturing off its low point for 2012 in November, the ISM said.
A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.
The New Orders Index remained at 50.3%, the same rate as in November, indicating growth in new orders for the fourth consecutive month. The Production Index registered 52.6%, a decrease of 1.1 percentage points, indicating growth in production for the third consecutive month. The Employment Index registered 52.7%, an increase of 4.3 percentage points, indicating a resumption of growth in employment following only one month of contraction since September 2009. Both the Exports and Imports Indexes registered 51.5%, returning both indexes to growth territory following consecutive periods of contraction of six and four months, respectively.
Comments from the panel this month are mixed, with some indicating a strengthening of demand and others indicating a continuing softness in demand. Additionally, many respondents express uncertainty about government regulations, taxes and global economics in general as we approach 2013.
Of the 18 manufacturing industries, seven are reporting growth in December in the following order: Furniture & Related Products; Paper Products; Petroleum & Coal Products; Wood Products; Primary Metals; Computer & Electronic Products; and Food, Beverage & Tobacco Products.
The nine industries reporting contraction in December — listed in order — are: Nonmetallic Mineral Products; Chemical Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Fabricated Metal Products; Transportation Equipment; Machinery; Electrical Equipment, Appliances & Components; and Apparel, Leather & Allied Products.
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