A report from
the Institute for Supply Management (ISM) revealed on Wednesday the U.S.
manufacturing sector’s activity shrank again in December, albeit at a softer pace than in the previous two
months.
The ISM's index
of manufacturing activity - the manufacturing PMI - checked in at 47.4 per cent
in December, up 0.7 percentage point from an unrevised November reading of
46.7 per cent. The December print
pointed to the contraction in the U.S. manufacturing sector for the 14th straight
month but was the highest one in three months.
Economists had expected
the indicator to increase to 47.1 per cent.
According to the report, the New Orders Index dropped
1.2 percentage points to 47.1 per cent last month but remained in contraction
territory for the 16th consecutive month. Meanwhile, the Production Index increased
1.8 percentage points to 50.3 per cent, returning into expansion territory
after a one-month decline. The Employment Index climbed 2.3 percentage
points to 48.1 per cent but stayed in negative territory for the 3rd month in
a row. Elsewhere, the Supplier Deliveries
Index went up 0.8 percentage point to 47.0 per cent, indicating that delivery
performance of suppliers to manufacturing organizations improved for the 15th
straight month in December (the indicator is inversed; a reading of above 50
per cent indicates slower deliveries). The Inventories Index decreased
0.5 percentage point to 44.3 per cent, suggesting manufacturing inventories dropped
at a faster rate compared to November. The Backlog of Orders Index surged 6.0
percentage points to 45.3 per cent, showing
order backlogs shrank for the 15th consecutive month, albeit at a notably
slower rate than in the previous month. On the price front, the Prices Index plunged
4.7 percentage points to 45.2 per cent, evincing raw materials prices declined
in December for the 8th straight month.