January 3, 2005
According to the December Manufacturing Institute for Supply Management (ISM) Report on Business®, released January 3, economic activity in the manufacturing sector grew in December for the 19th consecutive month, while the overall economy grew for the 38th consecutive month.
The PMI for December registered 58.6 percent, a 0.8 percentage point increase when compared to the November reading of 57.8 percent. A reading above 50 percent indicates that the manufacturing economy generally is expanding; below 50 percent indicates that it generally is contracting.
Norbert J. Ore, C.P.M., chair of the ISM Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation, said, "December's PMI, driven by a significant increase in the New Orders Index, is very encouraging as growth has accelerated for the second consecutive month. This completes a strong year for manufacturing based on the ISM data, as the overall index averaged above 60 percent for 2004. While there is continuing upward pressure on prices, the rate of increase is slowing and definitely trending in the right direction."
In December, 14 industries reported growth: Leather; Industrial & Commercial Equipment & Computers; Furniture; Food; Instruments & Photographic Equipment; Transportation & Equipment; Primary Metals; Miscellaneous; Chemicals; Rubber & Plastic Products; Electronic Components & Equipment; Apparel; Textiles; and Printing & Publishing.
ISM's Employment Index grew for the 14th consecutive month, following a 37-month trend of contraction. The index registered 52.7 percent in December compared to 57.6 percent in November, a decrease of 4.9 percentage points. An Employment Index above 48 percent, over time, generally is consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. The eight industries reporting growth in employment during December are: Leather; Apparel; Rubber & Plastic Products; Transportation & Equipment; Industrial & Commercial Equipment & Computers; Food; Miscellaneous; and Primary Metals.