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Manufacturing contracts further in December

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Manufacturing contracts further in December

Closely-watched indicator provides little holiday cheer for manufacturers.

According to a closely-watched report, economic activity in the US manufacturing sector contracted in December for the second consecutive month.

The December Manufacturing ISM Report On Business indicated that its PMI registered 48.2%, a decrease of 0.4 percentage point from the November reading of 48.6%. (Readings under 50.0% indicate contraction.)

Analysts had expected a reading of 49.0%.

"10 out of 18 manufacturing industries reported contraction in DecemberNew Orders, while remaining in contraction territory, rose in December, coming in at 49.2%, an increase of 0.3 percentage point from November. The Production Index also rose, coming in at 49.8%, 0.6 percentage point higher than the November reading of 49.2%.

Employment continued to fall in December, with the Employment Index registering at 48.1%, 3.2 percentage points below November. The Prices Index registered 33.5%, a decrease of 2 percentage points from the November reading of 35.5%, indicating lower raw materials prices for the 14th consecutive month.

Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee, commented on the report, noting that “As was the case in November, 10 out of 18 manufacturing industries reported contraction in December. Contraction in new orders, production, employment and raw materials inventories accounted for the overall softness in December."

 

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