For the 14th consecutive month, manufacturing economic activity contracted in December, according to the Institute for Supply Management’s December 2023 manufacturing sector report. The Purchasing Manager’s Index reading of 47.4% is up 0.7 points from the previous month, indicating a slower rate of contraction.
“None of the six biggest manufacturing industries registered growth in December,” said Timothy Fiore, chair of the ISM’s manufacturing business survey committee. “Four out of the five subindexes that directly factor into the Manufacturing PMI are in contraction territory, down from all five in November.” The PMI also suggests contraction of the overall economy.
The production index entered expansion territory with a reading of 50.3%, 1.8 points higher than November’s figure. Anything lower than 50% represents contraction.
Although remaining in contraction territory, the employment index reading of 48.1% is a 2.3-point increase from November. The new orders index is contracting faster, registering 47.1%, 1.2 points lower than the previous month.
Several respondents expressed optimism for 2024 in the comments of the survey, with one computer & electronic products executive noting, “As budgets get approval after the start of the calendar year, this should help drive investment and increase manufacturing activity once again.”
