ISM’s Manufacturing PMI Dips to 58.7% in December

Written by Tim Triplett

Economic activity in the manufacturing sector grew again in December, though at a slightly slower pace than in November, with the overall economy achieving a 19th consecutive month of growth, reports the Institute for Supply Management, Tempe, Ariz.

“The December Manufacturing PMI® registered 58.7%, a decrease of 2.4 percentage points from the November reading of 61.1%,” said Timothy R. Fiore, chairman of ISM’s Manufacturing Business Survey Committee. A reading above 50% indicates economic growth.

“The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with indications of improvements in labor resources and supplier delivery performance,” Fiore continued. “Shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products continue to plague reliable consumption. Coronavirus pandemic-related global issues — worker absenteeism, short-term shutdowns due to parts shortages, employee turnover and overseas supply chain problems — continue to impact manufacturing.”

The six biggest manufacturing industries — Chemical Products; Fabricated Metal Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Petroleum & Coal Products — registered moderate-to-strong growth in December, ISM reported, based on its monthly survey of supply chain executives.

“Manufacturing performed well with demand and consumption registering month-over-month growth. Meeting demand will remain a challenge due to hiring difficulties and a clear cycle of labor turnover at all tiers. For the second month in a row, Business Survey Committee panelists’ comments suggest month-over-month improvement on hiring, offset by backfilling required to address employee turnover. Supplier delivery rate improvement was indicated by the Supplier Deliveries Index softening in December. Transportation networks, a harbinger of future supplier delivery performance, are still performing erratically; however, there are signs of improvement,” added Fiore.

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