PMI Increases to 53.9 Percent in December
Economic activity in the manufacturing sector expanded in December for the 29th consecutive month as the PMI registered 53.9 percent, an increase of 1.2 percentage points from November, according to the latest Manufacturing ISM Report On Business from the Institute for Supply Management, Tempe, Ariz.
In addition, ISM’s New Orders Index increased 0.9 percent from November to 57.6 percent, reflecting the third consecutive month of growth after three months of contraction. Prices of raw materials decreased for the third consecutive month, with the Prices Index registering 47.5 percent, 2.5 percentage points higher than the November reading, but below the 50 percent level that indicates growth.
“Manufacturing finished 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," says Bradley J. Holcomb, chairman of ISM’s survey committee.
Of the 18 manufacturing industries polled, nine reported growth in December, including machinery and primary metals.
A PMI in excess of 42.5 percent, over a period of time, generally indicates an expansion of the overall economy, according to ISM. Therefore, December’s PMI of 53.9 percent suggests growth for the 31st consecutive month in the overall economy. "The average PMI for January through December (55.3 percent) corresponds to a 4.5 percent increase in real GDP,” Holcomb notes.