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Economic Data (USA)

Thursday, January 03, 2019

ISM Manufacturing Index for December 2018

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for December 2018:

Predicted: 57.9%
Actual: 54.1% (-5.2 points month-on-month change)


Previous month: 59.3%


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 made-in-the-USA sector contracted.


From Today's Report:

"...Economic activity in the manufacturing sector expanded in December, and the overall economy grew for the 116th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®..."

The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

  •     “Growth appears to have stopped. Resources still focused on re-sourcing for U.S. tariff mitigation out of China.”
     (Computer + Electronic Products)

  •     “Brexit has become a problem due to labeling changes.”
     (Chemical Products)

  •     “Customer demand continues to decrease [due to] concerns about the economy and tariffs.”
     (Transportation Equipment)

  •     “Starting to see more and more inflationary increases for raw materials. Also, suppliers [are] forcing price increases due to tariffs.”
    (Food, Beverage + Tobacco Products)

  •     “The ongoing open issues with tariffs between U.S. and China are causing longer-term concerns about costs and sourcing strategies for our manufacturing operations. We were anticipating more clarity [regarding] tariffs at the end of 2018.”

  •     “Business is steady, but pace of incoming orders are slowing.”
     (Furniture + Related Products)

  •     “Business is robust for certain sectors [aerospace] and flat to downward for others [energy]. Tariffs continue to impact business direction and profit.”
     (Miscellaneous Manufacturing)

  •     “Caution seems to be the outlook. Are we in a correction, or is the market getting ready to slow over time?”
     (Fabricated Metal Products)

  •     “No major change in business operations towards the end of 2018; however, we are carefully monitoring oil prices and outside influence from market conditions to better understand our 2019 outlook and capital plans.”
     (Petroleum + Coal Products)

  •     “Customers are hedge buying in December as a result of announced price increases starting in January.”
     (Textile Mills)


ISM Manufacturing Index - 12 Month History - December 2018 Update
ISM Manufacturing Index - 12 Month History
December 2018 Update



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