American factory activity contracted in December according to the Institute for Supply Management’s (ISM) monthly survey. The PMI Index fell to 47.2 (a reading above 50.0 indicates expansion), down -0.9 from November, to its lowest level since June 2009 during the Great Recession. New Orders, Production, Imports, New Export Orders, Employment and other sub-indices all signaled contraction with the exception of Prices and Supplier Deliveries. “Global trade remains the most significant cross-industry issue,” said ISM, “but there are signs that several industry sectors will improve as a result of the phase-one trade agreement between the U.S. and China.” Fifteen of eighteen manufacturing sectors reported contraction in December while three—Food, Beverage & Tobacco Products, Miscellaneous Manufacturing and Computer & Electronic Products—grew. Comments by survey respondents included:
- “Backlog of orders is shrinking due to new order pace continuing to fall.” (Computer & Electronic Products)
- “Starting to see suppliers try to pass on costs associated with tariffs.” (Food, Beverage & Tobacco Products)
- “Down month-to-month, but up over last year.” (Miscellaneous Manufacturing)
- “Anticipated large export orders did not materialize.” (Fabricated Metal Products)
- “…overall customer market has softened, resulting in corrections to near-term production schedules…” (Machinery)
See the full report here.
