Economy
December manufacturing remains in red: ISM
Written by Becca Moczygemba
January 3, 2024
Domestic manufacturing activity receded for the 14th straight month, according to the latest Institute for Supply Management (ISM) Manufacturing PMI report.
The ISM Manufacturing PMI registered 47.4% in December, up 0.7 percentage points from 46.7% reported in November. A reading above 50 indicates the manufacturing economy is growing, while a reading below 50 indicates contraction. The last time it was above 50 was in October 2022 when the reading was 50.2.
“The share of sector GDP registering a composite PMI calculation at or below 45% — a good barometer of overall manufacturing weakness — was 48% in December, compared to 54% in November and 35% in October,” Timothy R. Fiore, ISM chair, said in a statement on Wednesday.
A manufacturing PMI above 48.7% over time generally indicates an expansion of the overall economy, the report noted.
Supplier deliveries are up 0.8 percentage points from 46.2% in November, while the inventories index dropped by 0.5 percentage points.
Overall demand moderated with new orders contracting faster than the previous month, according to the report.
“None of the six biggest manufacturing industries registered growth in December,” Fiore said.
“We are seeing stronger demand from our American Automotive OEM customers now that the United Auto Workers (UAW) strike has been resolved. Looking at a very strong first quarter of 2024,” a producer of primary metals said.
Another survey respondent who produces fabricated metal products said, “We are forecasting a somewhat strong year for 2024. We’re currently mildly optimistic for how next year will play out.”
Likewise, a transportation equipment provider noted that demand is up across the board and orders are increasing.
The only manufacturing industry that reported growth in December was primary metals, ISM said.
Becca Moczygemba
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