Economic activity in the manufacturing sector contracted in December for the second consecutive month, while the overall economy grew for the 79th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee states, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (51.4 percent) corresponds to a 2.6 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI for December (48.2 percent) is annualized, it corresponds to a 1.6 percent increase in real GDP annually.”

A PMI above 43.1 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the December PMI indicates growth for the 79th consecutive month in the overall economy, while indicating contraction in the manufacturing sector.

“2015 was certainly a slow growth year for manufacturing, ending on a slow note with the last two months in the contraction territory,” adds Holcomb. “We’ll just have to wait and see where we go from here, but hopefully we found bottom.”

By: DocMemory
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