December Manufacturing Data Disappoints

Markit Economics and the Institute for Supply Management released December manufacturing data Friday. Both reports showed expansion, but slowing growth in December compared to November.

ISI data indicated that manufacturing “expanded in December as the PMI® registered 55.5 percent, a decrease of 3.2 percentage points when compared to November’s reading of 58.7 percent, indicating growth in manufacturing for the 19th consecutive month.”

The ISI reading was below expectations of 57.6, according to a Reuters poll of economists.

According to Markit, “December data signalled a further solid expansion of U.S. manufacturing production, alongside rising levels of employment and incoming new business.

“However, the final seasonally adjusted Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) fell from 54.8 in November to 53.9 in December (earlier ‘flash’ reading 53.7). As a result, the latest PMI figure indicated the weakest improvement in overall manufacturing sector business conditions since January," it added.

Chris Williamson, Chief Economist at Markit commented: “The big question of course is whether the pace of expansion will continue to weaken as we move into 2015. Companies are citing greater uncertainty about the outlook, especially in export markets, leading to some scaling back of expansion plans and a greater reluctance for customers to place orders compared to earlier in the year, which suggests a slowdown could become more entrenched unless demand revives.

“In that respect, December saw growth of new orders lift slightly higher, suggesting the environment may already be starting to improve amid lower oil prices and a sustained flow of better than expected economic data in recent months, especially in relation to domestic employment and consumer spending. Even if global demand remains subdued, a buoyant domestic market should therefore help sustain factory growth in coming months.”

Posted In: NewsEconomicsMarkitReutersThe Institute for Supply Management
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