U.S. manufacturing continues expansion: report

Economic activity in the U.S. manufacturing sector expanded in December for the 17th consecutive month, and the overall economy grew for the 20th consecutive month, according to a new report from the Institute for Supply Management (ISM).

The report was based on the latest Purchasing Managers’ Index (PMI) figures, an important indicator of economic activity, especially in the manufacturing sector.

According to the ISM report, manufacturing in the U.S. continued to grow in December as the PMI registered 57 per cent, an increase of 0.4 per cent when compared to November’s reading of 56.6 percent. A reading above 50 per cent indicates that the manufacturing economy is generally expanding, ISM said; below 50 per cent indicates that it is generally contracting.

“The manufacturing sector continued its growth trend as indicated by this month’s report. We saw significant recovery for much of the U.S. manufacturing sector in 2010,” said Norbert J. Ore, chair of the Tempe, Az.-based ISM. “The recovery centered on strength in autos, metals, food, machinery, computers and electronics, while those industries tied primarily to housing continue to struggle. Additionally, manufacturers that export have benefitted from both global demand and the weaker dollar. December’s strong readings in new orders and production, combined with positive comments from the panel, should create momentum as we go into the first quarter of 2011.”

Of the 18 manufacturing industries covered in the report, 11 are reporting growth in December, in the following order: apparel, leather and allied products; primary metals; fabricated metal products; machinery; computer and electronic products; food, beverage and tobacco products; textile mills; plastics and rubber products; transportation equipment; electrical equipment, appliances and components; and chemical products.

The four industries reporting contraction in December are nonmetallic mineral products, paper products, printing and related support activities, and miscellaneous manufacturing.