ISM Indexes Reach Year-High for 2016 in December

According to the latest report from the Institute for Supply Management, economic activity in the manufacturing sector expanded in December, and the overall economy grew for the 91st consecutive month.

The December PMI came in at 54.7%, which marked a 1.5% increase from the November reading of 53.2%.

As the PMI increased gradually, the new orders index jumped by 7.2%, rising to 60.2% from November’s reading of 53%. The production index (60.3%) and prices index (65.5%) all eclipsed the 60% mark as well, the latter of which indicates higher raw materials prices for the 10th-straight month.

The employment index did not experience a large boost in December, but did rise 0.8% to 53.1%. Meanwhile, inventories of raw materials dropped from 49% in November to 47% in December.

“The PMI, new orders, production and employment indexes all registered new highs for the year 2016, and the forward-looking comments from the panel are largely positive,” said Bradley J. Holcomb, chair of the ISM manufacturing business survey committee.

Of the 18 manufacturing industries, 11 reported growth in December in the following order, including petroleum and coal products, primary metals and machinery.

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