December was a good month for U.S. manufacturing as its economic activity continued to expand. The overall economy also grew for the 103rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
The December PMI® registered 59.7 percent, an increase of 1.5 percentage points from the November reading of 58.2 percent. PMI is an indicator of the economic health of the manufacturing sector; it's based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. As early as October 2015, the manufacturing economy was expanding with a PMI of 50.1 percent.
The New Orders Index registered 69.4 percent, an increase of 5.4 percentage points from the November reading of 64 percent.
Of the 18 manufacturing industries, 16 reported growth in December in the following order: Machinery; Computer & Electronic Products; Paper Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Primary Metals; Nonmetallic Mineral Products; Petroleum & Coal Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Furniture & Related Products; Transportation Equipment; Chemical Products; Fabricated Metal Products; and Electrical Equipment, Appliances & Components. Two industries reported contraction during the period: Wood Products; and Textile Mills.