ISM: 53.9

by Karl Denninger

Let’s have a peek!

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI registered 53.9 percent, an increase of 1.2 percentage points from November’s reading of 52.7 percent, indicating expansion in the manufacturing sector for the 29th consecutive month. The New Orders Index increased 0.9 percentage point from November to 57.6 percent, reflecting the third consecutive month of growth after three months of contraction. Prices of raw materials continued to decrease for the third consecutive month, with the Prices Index registering 47.5 percent, which is 2.5 percentage points higher than the November reading of 45 percent. Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012 as reflected by the panel in this month’s survey.”

Hmmm….

New orders were indeed improved, and production is up as well.  Inventories are being drawn in, which is good.  But imports are increasing from decreasing — which is not going to help the balance of payments, and in turn is going to drive fiscal policy issues in the year as well.

Employment was up and is positive but what we don’t know is how much of that, if any, was driven by seasonal factors.  We’ll figure that out in the coming months.

The report is pretty good on-balance, but the import levels are troubling, as the the spread between imports and exports is widening again — this is a decidedly negative macro factor.

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