After an unexpectedly strong push in November, the Purchasing Managers Index (PMI) fell slightly in December, down to 57 from 57.3. This ends the 6 month growth streak in the manufacturing sector, although it does mark the 55th consecutive month of growth for the overall economy.
As expected, Exports (-4.5%), Inventories (-3.5), and Backlog of Orders (-2.5) dropped heavily with the holiday season ending. Exports and Backlogs are still growing, but at a lesser rate, while Inventories are now contracting. Production (-0.6) was the only other factor to decrease, but still maintains the second strongest index ranking of 62.2.
The highest ranking on the index belongs to New Orders (+0.6) which hit 64.2 and fell behind Customers’ Inventories (+2.5), Supplier Deliveries (+1.5), and Prices (+1.0) for strongest growth rate. However, Customers’ Inventories are still quite low, registering only 47.5 on the index which marks the 25th consecutive month trending below the 50.0 line. Employment continues to rise (+0.4) while Imports reflected no change, remaining at the 55.0 level.
In December, only 13 of the 18 manufacturing industries reported growth. This was down from the 15 in November. However, November was the strongest month for 2013 with the 57.3 mark. The 2013 average was 53.9, with the first half of the year averaging 51.5 and the second half jumping remarkably to average 56.3 on the index. The 2013 PMI rose 2.7% over the 2012 rating of 51.2%.
The last 6 months of 2013 produced incredibly strong results for the manufacturing and distribution industries. SBS Group has a dedicated team of industry experts and ERP solutions that can help your organization capitalize on the strong growth. Contact us for more information.