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U.S. Manufacturing Growth Slows

Growth in the U.S. manufacturing sector slowed in December, according to the Institute for Supply…

  • January 22, 2019

Growth in the U.S. manufacturing sector slowed in December, according to the Institute for Supply Management.

However, economic activity in the sector did continue to expand, and the overall economy grew for the 116th consecutive month, according to a poll of the nation’s supply executives in the latest Manufacturing ISM Report on Business.

The December PMI registered 54.1 percent, a decrease of 5.2 percentage points from the November reading of 59.3 percent. Keep in mind that any reading over 50 signals growth in the sector, so things aren’t terrible.

Perhaps the most worrying aspect of the report was The New Orders Index, which registered 51.1 percent, a decrease of 11 percentage points from the November reading of 62.1 percent.

New orders is a leading indicator in the sector, and an 11% drop is a pretty large contraction. This indicates that the global slowdown in general, and U.S. tariffs in particular, are creating headwinds for U.S. manufacturing.

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