ISM manufacturing is still in contraction but at a decreased rate. However, employment weakened further.
Please consider the December 2024 Manufacturing ISM® Report On Business® .
The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:
“U.S. manufacturing activity contracted again in December, but at a slower rate compared to November. Demand showed signs of improving, while output stabilized and inputs stayed accommodative. Demand analysis includes: the (1) New Orders Index remaining in expansion territory, (2) New Export Orders Index increasing (up 1.3 percentage points and now ‘unchanged’), (3) Backlog of Orders Index slowing its rate of decline but continuing in contraction territory, and (4) Customers’ Inventories Index dropping into ‘too low’ territory.
Output (measured by the Production and Employment indexes) was positive; factory output stabilized compared to November, indicating that panelists’ companies are executing to plan. Employment contracted as final head-count adjustments were likely taken to prepare for 2025.
Inputs — defined as supplier deliveries, inventories, prices and imports — generally continued to accommodate future demand growth, with inventories and imports improving marginally (though remaining in contraction), prices increasing and supplier deliveries marginally slowing.
“Demand improved, production execution met November’s performance (and companies’ plans), de-staffing continued (but should end soon), and price growth was marginal. Fifty-two percent of manufacturing gross domestic product (GDP) contracted in December, down from 66 percent in November. The share of manufacturing sector GDP registering a composite PMI® calculation at or below 45 percent (a good barometer of overall manufacturing weakness) was 49 percent in December, a 1-percentage point increase compared to the 48 percent reported in November. None of the six largest manufacturing industries expanded in December, down from two in November,” says Fiore.
The seven manufacturing industries reporting growth in December — listed in order — are: Primary Metals; Electrical Equipment, Appliances & Components; Wood Products; Furniture & Related Products; Paper Products; Miscellaneous Manufacturing; and Plastics & Rubber Products. The seven industries reporting contraction in December — in the following order — are: Textile Mills; Fabricated Metal Products; Printing & Related Support Activities; Machinery; Chemical Products; Transportation Equipment; and Nonmetallic Mineral Products.
What Respondents Say
- “Slightly lower due to seasonality and end-of-year destocking.” [Chemical Products]
- “Automotive and powersport volume decreases.” [Transportation Equipment]
- “We are seeing a softening in sales. This is concerning as it’s our peak season.” [Food, Beverage & Tobacco Products]
- “We are constrained by technical labor, despite higher-than-normal backlog.” [Computer & Electronic Products]
- “Significant slowdown in production requirements in the last two months of the year.” [Machinery]
- “Order levels well below forecast projections.” [Fabricated Metal Products]
- “The increase in new orders has our plant at full capacity.” [Electrical Equipment, Appliances & Components]
- “Combo of seasonal factors plus increased demand outlook for 2025.” [Miscellaneous Manufacturing]
- “There is definitely an uptick this month, though not a stable one.” [Primary Metals]
- “The orders have increased slightly due to seasonal restocking.” [Plastics & Rubber Products]
Numbers 1, 2, 3, 5, and 6 are negative. 4, 7, and 8 are positive. 9 and 10 seem neutral.
The overall report seems neutral. I wonder how many firms are scrambling to get ahead of tariff actions by trump.
Chicago PMI Crashes
The ISM manufacturing index, although in contraction is markedly better than the Chicago area PMI.
On December 30, I noted Chicago PMI Crashes to 36.9 vs Expected 42.7
The Chicago PMI ends the year on a very sour note with new orders the lowest since May 2020.
On the consumer side, Credit Card Defaults Surge to the Highest Level Since the Great Recession
The s*itshow is only beginning.
Johnson going to lose first round vote! ROFLMAO!
No one cares. They can do it 50 times. He will still be speaker.
ROFLMAO! It’s the best circus in town!
He needs some time off to open his first checking account.
BREAKING: The new Congress is the third oldest ever with an average age of politician at 59 years old, per NBC
Term limits. Age limits. All of it.
… and my First Lady will be 82 at the end of her term. Why are you discriminating against the elderly?
This will be the latest post dated recession ever
Biden had a lot of reimagineering going on. Who needs engineers and industrial production when you can just re-imagineer the social construct and pay for it with imaginary MMT money.
I’m surprised you rated this report as “neutral”. Sure, it’s only a M-o-M change, but 8 of the 10 subcomponents were better. And the PMI is just short (49.3) of a growth scenario.
Plus, weekly unemployment initial insurance claims were lower, by a little
Reposted
Auto loan delinquency rates are at their highest in more than a decade, per WSJ
Horrifying numbers. May take a decade to turn this around….mish how about a post grading Bidens term.
You’re getting it now… expect nothing from me and the First Lady, and shift blame to the next admin that tries to pick up the pieces.
You’re a wonderful minion. Gold star for you!
LOL, I do not think people here will get the humor.
Yeah this is not a mensa meeting that’s for sure.
I’d also love to see an end-of-the term accounting for where Biden (and the Fed) ended up, and where Trump starts.
But Mish should probably wait a few weeks longer until the BLS updates its employment numbers for the past couple of years from the BLS Household Survey, after the Census just updated its population estimates. That BLS revision is likely to have increases in employment numbers, perhaps substantial
Yeah I was talking about more than just government stats. Like the fact that the debt increases have more than offset the GDP gains. Or how inflation has resulted in people’s incomes going down in real terms. Or the 10 million plus illegals he let in. Etc etc…But here’s a cookie while you wait for BLS numbers to soothe you.
LOL – those are all government stats. Maybe our education system in America does suck?
Debt went up under Trump as well, so did illegals coming into the country. And his COVID stimuli started the inflationary increase.
I don’t need a cookie, Grandpa, but it sounds like you need your mid-day nap
Inflation is simply the sound of the last assets being taken from the middle class. Sounds like… victory! Now for the tarrifs to finish the job and bring me the wealth I am entitled to!