Economy: ISM Manufacturing Index for December 2019

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for December 2019:

Predicted: 49.4%

Actual: 47.2% (-0.9 point month-on-month change)

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Previous month: 48.1%

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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.

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From Today's Report:

"..Economic activity in the manufacturing sector contracted in December, and the overall economy grew for the 128th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®...."

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

"Backlog of orders is shrinking due to new order pace continuing to fall."
(Computer + Electronic Products)

"Due to sluggish sales, we have introduced promotions to generate increased sales."
(Chemical Products)

"Cautiously optimistic is the rule these days. Sales are decent, but we're wondering what 2020 will bring. Still hedging that it will be successful — but maybe not as much as this year."
(Transportation Equipment)

"Starting to see suppliers try to pass on costs associated with tariffs. Uncertainty on the trade front continues to keep agricultural markets on the defensive."
(Food, Beverage + Tobacco Products)

"Down month-to-month, but up over last year."
(Miscellaneous Manufacturing)

"Anticipated large export orders did not materialize. As a result, expected U.S. production has decreased."
(Fabricated Metal Products)

"Dealer inventories have rebounded, and overall customer market has softened, resulting in corrections to near-term production schedules and a tentative forecast outlook."
(Machinery)

"Export markets continue to weaken for plastic resins — Mexican producers are actually trying to sell product back into the U.S. due to weak in-country demand."
(Plastics + Rubber Products)

"Our outlook for the first quarter of 2020 is positive. We have secured contracts from a number of former customers and expect sales growth of about 5 percent over Q4 of 2019."
(Textile Mills)