US Manufacturing Sector Falls for 5th Consecutive Month

  • The Institute of Supply Chain Management (ISM) manufacturing index fell to 47.2% in December, down from 48.1% in November.
  • This indicates the manufacturing sector’s pace of contraction accelerated in December, the fifth month in a row of contraction.
  • The data are their lowest level since 2009.

Bad is going to worse in the US manufacturing sector. The Institute of Supply Chain Management (ISM) manufacturing index fell to 47.2% in December, down from 48.1% in November. Any number below 50% indicates the sector is in contraction. The data show the rate of contraction is increasing.

The index is at its lowest level since June 2009, during the Great Recession. This month’s contraction marks five months in a row of downward trend for the sector. New orders, production, and employment indicators also fell.

Trade tensions and a sluggish broader economy were cited as factors contributing to the difficulties in the sector. Manufacturing makes up about 1/3 of the broader US economy, and typically acts as a leading indicator of the service sector.

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