Highlights of the December US ISM manufacturing index
Biggest drop since 2008
Lowest since August 2016
Prior was 59.3
Estimates ranged from 55.0 to 59.0
Employment 56.2 vs 58.4 prior
Prices paid 54.9 vs 60.7 prior
New orders 51.1 vs 62.1 prior
Backlog of orders 50.0 vs 56.4
This is a poor report and mirrors some of the regional numbers that tanked in December. ADP was very strong today but employment is a lagging indicator. This is a clearer sign that there's been an inventory cliff late in the year.
Here's the commentary in the report:
- "Growth appears to have stopped. Resources still focused on re-sourcing for U.S. tariff mitigation out of China." (Computer & Electronic Products)
- "Brexit has become a problem due to labeling changes." (Chemical Products)
- "Customer demand continues to decrease [due to] concerns about the economy and tariffs." (Transportation Equipment)
- "Starting to see more and more inflationary increases for raw materials. Also, suppliers [are] forcing price increases due to tariffs." (Food, Beverage & Tobacco Products)
- "The ongoing open issues with tariffs between U.S. and China are causing longer-term concerns about costs and sourcing strategies for our manufacturing operations. We were anticipating more clarity [regarding] tariffs at the end of 2018." (Machinery)
- "Business is steady, but pace of incoming orders are slowing." (Furniture & Related Products)
- "Business is robust for certain sectors [aerospace] and flat to downward for others [energy]. Tariffs continue to impact business direction and profit." (Miscellaneous Manufacturing)
- "Caution seems to be the outlook. Are we in a correction, or is the market getting ready to slow over time?" (Fabricated Metal Products)
- "No major change in business operations towards the end of 2018; however, we are carefully monitoring oil prices and outside influence from market conditions to better understand our 2019 outlook and capital plans." (Petroleum & Coal Products)
- "Customers are hedge buying in December as a result of announced price increases starting in January." (Textile Mills)
