U.S. manufacturing index posts fifth consecutive monthly increase

Index registers 55.9 percent in December 2009, marking the fifth consecutive month in positive territory.

The Institute for Supply Management (ISM, Tempe, Ariz., USA) on Jan. 4 reported that economic activity in the U.S. manufacturing sector expanded in December 2009 for the fifth consecutive month, and the overall economy grew for the eighth consecutive month. ISM's Purchasing Managers Index (PMI) registered 55.9 percent, following a November value of 53.6 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

The report was issued by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The manufacturing sector grew for the fifth consecutive month in December as the PMI rose to 55.9 percent, its highest reading since April 2006 when it registered 56 percent. This month’s report is quite strong as both the New Orders and Production Indexes are above 60 percent. The sector may be benefiting from an excessive destocking cycle as indicated by the recent performance of the Customers’ Inventories Index. Customers’ inventories have been ‘too low’ for nine consecutive months, and this month’s index is the lowest reading since the inception of the index in January 1997. Overall, the recovery in manufacturing is continuing, but there are still some industries mired in the downturn, as evidenced by the seven industries still in decline.”