Jan. 6, 2016
Manufacturing Sector Contracts Again in December
Economic activity in the manufacturing sector contracted in December for the second straight month, reports the Tempe, Ariz.-based Institute for Supply Management in its monthly Report on Business. The PMI for December registered 48.2 percent, a decline of 0.4 percentage points from November, and below the 50 percent threshold that indicates growth.
Of the 18 manufacturing industries surveyed, only six reported growth in December, including miscellaneous manufacturing. Among the 10 industries reporting contraction were machinery, primary metals, fabricated metal products, and appliances and components.
Other indices showed mixed results in November. The New Orders Index declined 0.3 percentage points to 49.2 percent, and the Employment Index fell 3.2 percentage points to 48.1. However, the Production Index increased 0.6 percentage points to 49.8 percent, while the New Export Orders Index climbed 3.5 percentage points to 51.0 percent.
When annualized, the December PMI corresponds to a 1.6 percent increase in real GDP, reports Bradley Holcomb, chairman of ISM’s Manufacturing Business Survey Committee. The full-year average of 51.4 percent corresponds to a 2.6 percent increase in annual GDP.