The Institute for Supply Management’s PMI Index, a closely watched indicator of manufacturing activity nationwide, fell 5.2 points in December, its largest drop in over 10 years. The PMI Index now stands at 54.1, its lowest level in two years, down 7.3 points since August when it reached a 14-year high of 61.3. A reading above 50 is still indicative of growth, however this PMI reading comes on the heels of other declines, suggesting that manufacturing is slowing in the U.S. and worldwide:
- Five Federal Reserve regional manufacturing indices, including New York’s Empire State Manufacturing Survey, declined in December;
- IHS Markit’s global manufacturing index fell to its lowest level in over two years; and
- China’s PMI Index dropped to 49.7 signaling manufacturing contraction; and
- Apple lowered its 1Q2019 revenue guidance citing slowing growth in China.
Respondents to the PMI survey mentioned U.S. tariffs, resultant price increases and Brexit uncertainty, among other things, as reasons for concern. See the full ISM report here.