Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
ISM Manufacturing had been acting squirrel-ly the past two months, falling below the 50 threshold denoting contraction versus expansion. The just released data has this number back over 50, and beating expectations by 0.2. Of the key sub indexes new orders flat month over month, employment up 4.3, and prices up 3.
(Separately construction spending fell 0.3%, the first drop in 8 months.)
Full report here.
“The PMI™ registered 50.7 percent, an increase of 1.2 percentage points from November’s reading of 49.5 percent, indicating expansion in manufacturing for only the third time in the last seven months. This month’s PMI™ reading moved manufacturing off its low point for 2012 in November. The New Orders Index remained at 50.3 percent, the same rate as in November, indicating growth in new orders for the fourth consecutive month. The Production Index registered 52.6 percent, a decrease of 1.1 percentage points, indicating growth in production for the third consecutive month. The Employment Index registered 52.7 percent, an increase of 4.3 percentage points, indicating a resumption of growth in employment following only one month of contraction since September 2009. Both the Exports and Imports Indexes registered 51.5 percent, returning both indexes to growth territory following consecutive periods of contraction of six and four months, respectively. Comments from the panel this month are mixed, with some indicating a strengthening of demand and others indicating a continuing softness in demand. Additionally, many respondents express uncertainty about government regulations, taxes and global economics in general as we approach 2013.”
WHAT RESPONDENTS ARE SAYING …
- “Many Chinese sources are coming to us with cost reductions to maintain their current business volumes.” (Machinery)
- “Saw some stronger than expected demand in October and November, but December demand is weak comparatively.” (Food, Beverage & Tobacco Products)
- “We are seeing stabilization of orders and costs as well as production capacity for the first time in months.” (Miscellaneous Manufacturing)
- “We are experiencing a mix of results — domestic up year over year for industrial business, down in retail and down in LATAM, EU and Asia. Next year is anyone’s guess — has never been so unpredictable.” (Apparel, Leather & Allied Products)
- “Black Friday was good, but forward economic visibility is foggy.” (Computer & Electronic Products)
- “The election is over; unemployment is dropping; consumer confidence is increasing as are home sales prices. We seem to be turning the corner. New car sales are increasing, which affects our customers.” (Fabricated Metal Products)
- “Business conditions have flattened out since last month. Overall production has leveled off from their previous reduction last month.” (Transportation Equipment)
- “Business is strengthening.” (Furniture & Related Products)
- “Prices and orders are staying stronger than normal for December — a pleasant surprise.” (Wood Products)
- “Uncertainty in additional government regulations and tax climate seems to be slowing orders.” (Chemical Products)
| MANUFACTURING AT A GLANCE DECEMBER 2012 |
||||||
|---|---|---|---|---|---|---|
| Index | Series Index Dec |
Series Index Nov |
Percentage Point Change |
Direction | Rate of Change |
Trend* (Months) |
| PMI™ | 50.7 | 49.5 | +1.2 | Growing | From Contracting | 1 |
| New Orders | 50.3 | 50.3 | 0.0 | Growing | Same | 4 |
| Production | 52.6 | 53.7 | -1.1 | Growing | Slower | 3 |
| Employment | 52.7 | 48.4 | +4.3 | Growing | From Contracting | 1 |
| Supplier Deliveries | 54.7 | 50.3 | +4.4 | Slowing | Faster | 2 |
| Inventories | 43.0 | 45.0 | -2.0 | Contracting | Faster | 2 |
| Customers’ Inventories | 47.0 | 42.5 | +4.5 | Too Low | Slower | 13 |
| Prices | 55.5 | 52.5 | +3.0 | Increasing | Faster | 5 |
| Backlog of Orders | 48.5 | 41.0 | +7.5 | Contracting | Slower | 9 |
| Exports | 51.5 | 47.0 | +4.5 | Growing | From Contracting | 1 |
| Imports | 51.5 | 48.0 | +3.5 | Growing | From Contracting | 1 |
| OVERALL ECONOMY | Growing | Faster | 43 | |||
| Manufacturing Sector | Growing | From Contracting | 1 | |||
*Number of months moving in current direction.
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