The ISM Manufacturing survey improved and remained in expansion. The key internals are in expansion. The Markit PMI manufacturing Index is in positive territory and improved.

Analyst Opinion of the ISM Manufacturing Survey

Based on these surveys and the district Federal Reserve Surveys, one would expect the Fed’s Industrial Production index growth rate to improve. Overall, surveys do not have a high correlation to the movement of industrial production (manufacturing) since the Great Recession.

From Bloomberg/Econoday:

  Consensus Range Consensus Actual Markit Manufacturing 55.0 to 55.5 55.0 55.1 ISM Manufacturing 57.1 to 59.5 58.0 59.7

From the Markit PMI Manufacturing Index:

Operating conditions improve at quickest rate for nine months

  • Output expands at quickest pace in 11 months supported by steep increase in total new work
  • Rate of job creation fastest since September 2014
  • December data indicated a marked improvement in US manufacturing operating conditions. The latest upturn was supported by faster increases in output and new orders, amid reports of greater client demand. In line with stronger production growth, employment rose further and at the fastest pace since September 2014. Backlogs meanwhile increased at the quickest rate since October 2015 to indicate ongoing capacity pressures. Supply chain delays and increased global demand for inputs pushed costs up further, with the rate of cost inflation remaining sharp overall. Charge inflation, however, softened. Business confidence remained robust, driven by more favourable demand conditions.
  • The seasonally adjusted IHS Markit final US Manufacturing Purchasing Managers’ Index™ (PMI™) registered 55.1 in December, up from 53.9 in November. The latest index reading was the highest since March 2015 and signalled a solid improvement in the health of the sector. December data also rounded off the strongest quarterly performance since the start of 2015.

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