The ISM index stood at 58.7%, up from 61.1% in November. Analysts had expected a more moderate decline, to 60.3%.
Growth in the manufacturing sector in the United States slowed in December, with production still constrained by supply difficulties and understaffing, despite signs of improvement on both fronts, according to the ISM professional federation index. published Tuesday.
The index stood at 58.7%, against 61.1% in November, detailed the federation in a press release. This is less than expected, since analysts were expecting a more moderate decline, to 60.3%.
Activity is growing when the index is above 50%; it contracts when it is lower than this limit.
In detail, new orders, production and employment are improving, while suppliers’ deliveries are slowing, but at a slower pace than in the previous month.
“The US manufacturing industry remains in a demand-driven and supply-chain constrained environment, with signs of improvement in workforce and supplier deliveries,” commented the head of the industry. ISM survey Timothy Fiore, quoted in the press release.
He thus underlines that “shortages of (…) raw materials, high prices and delivery difficulties continue to weigh on reliable consumption”.
Manufacturing remains globally slowed by the pandemic, he adds, citing “worker absences, closures due to parts shortages, staff turnover and supply chain issues at the foreigner”.
As for prices, they continue to climb, but at a slower pace, and the index even falls “to its lowest level since November 2020,” said Nancy Vanden Houten, economist for Oxford Economics.
The pressures are starting to ease on the global supply chain, according to a new barometer published Tuesday by the New York branch of the US central bank (Fed).
The index “seems to suggest that pressures on the global supply chain, while still historically high, have peaked and may begin to moderate somewhat in the future,” the publication said.