ISM: Manufacuring expansion continues
The most recent report from the Institute for Supply Management showed that economic activity in the manufacturing sector expanded in December for the 29th consecutive month.
The PMI registered 53.9 percent, an increase of 1.2 percentage points from November's reading of 52.7 percent. The New Orders Index increased 0.9 percentage point from November to 57.6 percent, reflecting the third consecutive month of growth after three months of contraction.
Prices of raw materials continued to decrease for the third consecutive month, with the Prices Index registering 47.5 percent, which is 2.5 percentage points higher than the November reading of 45 percent.
"Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012 as reflected by the panel in this month's survey," said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation (MAPI), called the report encouraging.
"In the last 25 years, the ISM index averaged 52.4, and thus December's 53.9 index is well above average; it showed advances in nearly all the major components—particularly in production, employment, and backlogs. The only negative aspect to the report is that imports improved faster than exports," Mecksroth said.
"The first report on manufacturing activity for the month of December should ease fears that the economy is slipping back into recession," he added, "as a recession would show up first in manufacturing activity, and this is not the case. That said, we expect only a modest pace of growth in manufacturing production in 2012. Consumers are constrained by debt and this is restraining the pace of growth. Business equipment investment, oil country goods and equipment, and motor vehicles should be the growth drivers in 2012."
INDUSTRIAL SUPPLY MAGAZINE
The May/June issue of Industrial Supply magazine features an in-depth cover story about GHX Industrial. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
