Manufacturing
in the U.S. Just Accelerated to Its Best Year Since 2004, by Katia Dmitrieva, 1/3/18, Bloomberg
U.S. manufacturing expanded in
December at the fastest pace in three months, as gains in orders and production
capped the strongest year for factories since 2004, the Institute for Supply
Management said Wednesday.
Highlights of ISM Manufacturing
December
Factory index climbed to 59.7 from
58.2. Readings above 50 indicate expansion.
Gague of new orders advanced to 69.4, the highest in nearly 14 years
from 64. Measure of production increased to 65.8, the strongest since May 2010
from 63.9.
Key Takeaways
The survey-based measure of factory
activity, the year’s second-highest behind September, when storm-related supply delays boosted the index -- brings
the 2017 average to 57.6, the best in 13 years.
The latest gain extends a string of
strong readings that’s been fueled by more domestic business investment, improving global economies
and steady spending by American households.
A common refrain from companies
surveyed, though, was difficulty finding highly-skilled labor, and some firms
are paying higher wages to attract the workforce needed,
ISM manufacturing survey committee
chairman Timothy Fiore said on a conference call with reporters.
The acceleration in bookings
indicates production will remain robust in coming months as factories race to
limit mounting order backlogs amid declining customer inventories. Increasing
export orders underscore improvement in global markets.
The figures suggest manufacturing
strength will persist into early 2018, even after the ISM’s semi-annual survey
of purchasing managers published last month showed factories anticipate growth
in capital spending to slow this year. The December monthly poll was taken
before President Donald Trump signed the tax legislation, which provides
companies with incentives to invest more, Fiore said in an interview.
Other Details
·
Sixteen of 18 industries reported
growth in December, led by machinery and computer and electronic products; wood
products and textile mills reported contraction
·
ISM factory employment gauge
declined to a still-strong 57 from 59.7
·
Measure of export orders increased
to a six-month high of 58.5 from 56
·
Gauge of supplier deliveries climbed
to 57.9 from 56.5, indicating stronger demand was leading to longer lead times
·
Index of customer inventories fell
to 42 from 45.5, signaling stockpiles were declining at a faster pace
·
Factory inventories index showed a
third straight month of contraction
·
Index of prices paid climbed to 69
from 65.5
— With assistance by Alexandre
Tanzi
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