U.S. manufacturing activity continued to expand in December, according to the Institute for Supply Management’s Manufacturing Purchasing Managers’ Index released on Tuesday.
The index registered 60.7 in December, its eighth straight month of expansion, and 3.2 points above the 57.5 reading in November. December’s reading was well ahead of economists’ forecasts, which called for a reading of 56.8. Any reading above 50 suggests an expansion.
All six of the biggest manufacturing industries in the ISM index registered moderate to strong growth in December.
All six of the biggest manufacturing industries in the index registered moderate to strong growth — fabricated metal products; computer and electronic products; transportation equipment; chemical products; petroleum and coal products; and food, beverage and tobacco products.
The expansion in the index was led by growth in the new orders, production and employment indices, and is a pleasant surprise compared with recent data from the regional manufacturing surveys. That may be because the indices do not include activity from states, which make up the lion’s share of activity with China.
The new orders index registered 67.9, up 2.8 points from the November reading of 65.1. The production index registered 64.8, an increase of 4 points compared to the November reading of 60.8. The employment index returned to expansion territory at 51.5, 3.1 points higher than the November reading of 48.4, showing there is still work to be done before employment reaches pre-pandemic levels.
Overall, manufacturing growth remains on solid footing as the new year begins, with the headline index at its highest since August 2018.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.