ISM data showed manufacturing accelerated in Dec. 2011

PMI jumped to 53.9% in latest survey, finished 2011 on the upswing.

Source: Institute for Supply Management (ISM)

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Economic activity in the manufacturing sector expanded in December for the 29th consecutive month, and the overall economy grew for the 31st consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report on Business.

The purchasing managers index (PMI) registered 53.9%, an increase of 1.2 percentage points from November's reading of 52.7%, indicating expansion in the manufacturing sector for the 29th consecutive month. The New Orders Index increased 0.9 percentage points from November to 57.6%, reflecting the third consecutive month of growth after three months of contraction.

Prices of raw materials continued to decrease for the third consecutive month, with the Prices Index registering 47.5%, which is 2.5% age points higher than the November reading of 45%.

Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012 as reflected by the panel in this month's survey,” said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

Manufacturing continued its growth in December as the PMI registered 53.9%, an increase of 1.2 percentage points when compared to November's reading of 52.7%. A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.

A PMI in excess of 42.5%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 31st consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 29th consecutive month.

"The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (55.3% ) corresponds to a 4.5% increase in real gross domestic product,” said Holcomb. “In addition, if the PMI for December (53.9%) is annualized, it corresponds to a 4% increase in real GDP annually."

Edited by Amanda McLeman, Managing Editor, Plant Engineering.