New Orders, Production and Employment Growing; Inventories Contracting; Supplier Deliveries Slowing
Friday, January 17, 2014 at 4:40PM January 2, 2014
Economic activity in the manufacturing sector expanded in December for the seventh consecutive month, and the overall economy grew for the 55th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report on Business.
The PMI registered 57 percent, the second highest reading for the year, just 0.3 percentage point below November's reading of 57.3 percent. The New Orders Index increased in December by 0.6 percentage point to 64.2 percent, which is its highest reading since April 2010 when it registered 65.1 percent. The Employment Index registered 56.9 percent, an increase of 0.4 percentage point compared to November's reading of 56.5 percent. December's employment reading is the highest since June 2011 when the Employment Index registered 59 percent. Comments from the panel generally reflect a solid final month of the year, capping off the second half of 2013, which was characterized by continuous growth and momentum in manufacturing.
*A PMI in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the December PMI indicates growth for the 55th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the seventh consecutive month. The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (53.9 percent) corresponds to a 3.7 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI for December (57 percent) is annualized, it corresponds to a 4.6 percent increase in real GDP annually.
Source: Institute For Supply Management
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