Manufacturing Industry Contracts for Second Consecutive Month

The ISM Manufacturing Index fell to 48.2 points in December – down 0.4 points from November’s reading. December’s reading marked only the second monthly contraction since November 2012, as readings below 50 indicate contraction in the manufacturing industry. Of the eighteen industries, six reported expansion, while ten reported contraction for December. Business sentiment was mixed as low oil prices negatively impacted some industries while benefiting others.

The Employment Index fell 3.2 points from November to 48.1, indicating a decline in employment growth. Seven of the eighteen industries reported growth, while nine industries, including apparel, leather and allied products, petroleum and coal, primary metals, and transportation equipment, reported contractions.

The index for new orders was 49.2, indicating contraction for the second consecutive month. Eleven industries reported a decline in new orders compared to seven in the previous month.

Export orders increased 3.5 points to 51.0, following six consecutive months of declines. Eight industries, including textile mills, printing and miscellaneous manufacturing reported an increase in activity, while transportation equipment, computer and electronic products, plastics and rubber products and primary metals, reported a decrease in activity.

The inventories index registered 43.5 points in December, indicating that raw materials inventories contracted for the sixth consecutive month.

The price index fell 2.0 points to 33.5, indicating a decrease in raw materials prices for the fourteenth consecutive month.

Read the ISM release.