United States: PMI continues to grow in December
January 3, 2011
The ISM manufacturing index (PMI) increased from 56.6% in November to 57.0% in December. The figure surprised the market on the downside as it had anticipated the PMI increasing to 57.2%. At the current level, the index points to an uninterrupted expansion in manufacturing activity since August 2009, thus confirming a slow but steady recovery in the sector. A reading above 50% indicates that the manufacturing sector is expanding, while a reading below 50% is indicative of a contraction. The moderate increase over the previous month reflected accelerating new orders and production, partially offset by slowing growth in employment and inventories. The category experiencing the largest decrease was inventories, falling from 56.7% in November to 51.8% in December. On the other hand, the production component gained 5.7 points, driving the sub-index to 60.7%, which points to a solid recovery in the manufacturing activity in 2011. At the current level, all five sectors which make up the manufacturing index currently sit above the 50% threshold.