December Markit Manufacturing: Production Growth Constrained

The December US Manufacturing Purchasing Managers' Index conducted by Markit came in at 57.7, down 0.6 from the final November figure.

Here is an excerpt from IHS Markit in their latest press release:

“December saw another subdued increase in US manufacturing output as material shortages and supplier delays dragged on. Although some reprieve was seen as supply chains deteriorated to the smallest extent since May, the impact of substantially longer lead times for inputs thwarted firms’ ability to produce finished goods yet again.

“Adding to the sector’s challenges was an ebb in client demand from the highs seen earlier in 2021, with new orders rising at the slowest pace for a year, largely linked to a reluctance at customers to place orders before inventories were worked through. Alongside a slight pick-up in hiring, softer demand conditions contributed to the slowest rise in backlogs of work for ten months.

“While shortages remained significant, the end of the year brought with it some signs that cost pressures have eased. The uptick in input prices was the slowest for six months, and firms recorded softer increases in selling prices amid efforts to entice customer spending.” [Press Release]

 

Here is a snapshot of the series since mid-2012.

Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here).

The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend.