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Economic Data (USA)

Wednesday, January 02, 2013

ISM Manufacturing Index for December 2012

Earlier today, the Institute for Supply Management (ISM) released their Purchasing Manager's Index (PMI) for December 2012:

Predicted: 50.5%
Actual: 50.7%

Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the manufacturing sector contracted.

Last month, the PMI was 49.5%.
The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

"...'Many Chinese sources are coming to us with cost reductions to maintain their current business volumes.' (Machinery)

'Saw some stronger than expected demand in October and November, but December demand is weak comparatively.' (Food, Beverage & Tobacco Products)

'We are seeing stabilization of orders and costs as well as production capacity for the first time in months.' (Miscellaneous Manufacturing)

'We are experiencing a mix of results — domestic up year over year for industrial business, down in retail and down in LATAM, EU and Asia. Next year is anyone's guess — has never been so unpredictable.' (Apparel, Leather & Allied Products)

'Black Friday was good, but forward economic visibility is foggy.' (Computer & Electronic Products)

'The election is over; unemployment is dropping; consumer confidence is increasing as are home sales prices. We seem to be turning the corner. New car sales are increasing, which affects our customers.' (Fabricated Metal Products)

'Business conditions have flattened out since last month. Overall production has leveled off from their previous reduction last month.' (Transportation Equipment)

'Business is strengthening.' (Furniture & Related Products)

'Prices and orders are staying stronger than normal for December — a pleasant surprise.' (Wood Products)

'Uncertainty in additional government regulations and tax climate seems to be slowing orders.' (Chemical Products)..."

Click here to view the complete ISM report.

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