For the eighth consecutive month, economic activity in the manufacturing sector grew in December according to the latest Manufacturing ISM Report On Business, which was released on Jan. 5.
The December manufacturing PMI registered 60.7%, up 3.2 percentage points from the November reading of 57.5%.
“Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that are limiting manufacturing growth potential,” said Timothy R. Fiore of ISM/ “However, panel sentiment remains optimistic (three positive comments for every cautious comment), an improvement compared to November.”
Index readings are as follows:
- The New Orders Index registered 67.9%, up 2.8 percentage points from the November reading of 65.1%.
- The Production Index registered 64.8%, an increase of 4 percentage points compared to the November reading of 60.8%.
- The Backlog of Orders Index registered 59.1%, 2.2 percentage points higher compared to the November reading of 56.9%.
- The Employment Index returned to expansion territory at 51.5%, 3.1 percentage points higher from the November reading of 48.4%.
- The Supplier Deliveries Index registered 67.6%, up 5.9 percentage points from the November figure of 61.7%.
- The Inventories Index registered 51.6%, 0.4 percentage points higher than the November reading of 51.2%.
- The Prices Index registered 77.6%, up 12.2 percentage points compared to the November reading of 65.4%.
- The New Export Orders Index registered 57.5%, a decrease of 0.3 percentage point compared to the November reading of 57.8%.
- The Imports Index registered 54.6%, a 0.5-percentage point decrease from the November reading of 55.1%.”
What Respondents are Saying:
“Our company and industry are continuing to have tailwinds from the COVID-19 pandemic research support for vaccines and treatments. While our services are delayed, many customers are not cancelling outright, and business picked up for us in the last month — especially in China, where business growth is back on track.” (Computer & Electronic Products)
“Continued to survive COVID-19 shutdowns, customer restrictions and personnel issues (work from home and COVID-19 outbreaks) and managed to maintain slight growth over 2019.” (Chemical Products)
“COVID-19 outbreaks are causing supply chain issues for Tier-1 and Tier-2 suppliers. More work needs to ensure suppliers keep us in the loop with any problem in their supply chain. But end-customer demand for products is keeping production and future outlook positive.” (Transportation Equipment)
“COVID-19 is affecting us more strongly now than back in March. Vendors/service suppliers unable to maintain levels of service due to employee shortages. Logistic issues also hurting us due to coronavirus-related problems.” (Food, Beverage & Tobacco Products)
“Current business outlook is strong through the first quarter of 2021. We are anticipating 20% growth in sales for 2021.” (Fabricated Metal Products)
“Sales are now slightly above pre-COVID-19 sales.” (Machinery)
“Sales are now exceeding pre-COVID-19 levels, but uncertainty remains through the winter months while COVID-19 is still rampant.” (Miscellaneous Manufacturing)
“Business is stronger than expected, with higher demand for many products. Volatility continues due to the very persistent pandemic and associated risks.” (Electrical Equipment, Appliances & Components)
“Suppliers are having difficulty finding and retaining labor leading to supply constraints.” (Plastics & Rubber Products)
“Fourth-quarter production improved more than anticipated, both against the rolling forecast and compared to typical Q4 business.” (Primary Metals)
