Friday, January 2, 2015

ISM Manufacturing Index Lower Than Expected, But Still Expanding

The ISM manufacturing index dipped 3.2 percentage points to 55.5 in December, the third decline in the past four months. Index readings above 50 indicate expansion in the manufacturing economy. As of December, the index has been expanding for 19 consecutive months, although the pace has declined more than was expected. Of the 18 manufacturing industries indexed, 11 reported growth in December.

The New Orders Index declined 8.7 points to 57.3, and the Inventory Index decreased 6.0 point to 45.5. The gap between New Orders and Inventories—a proxy for future production—narrowed 2.7 points to 11.8 points.

The Employment Index increased 1.9 points to 56.8. This is the 18th consecutive quarter of growth in employment. Eleven of the 18 manufacturing industries indexed reported growth in employment. However, two industries—computer & electronic products and plastics & rubber products—posted declines.

Exports declined 3.0 points to 52.0, but continued to grow for the 25th consecutive month. Imports also declined, dropping 1.0 point to 55.0.

Prices dropped 6.0 percentage points to 38.5. This is the second month in a row that the index is reporting a decrease in the price of raw materials.

Read the ISM release.

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