Manufacturing activity expanded in December following a decline the previous month, according to the latest manufacturing Report on Business issued by the Institute of Supply Management.

The December Purchasing Managers’ Index (PMI), a composite based on several factors, registered 51.42 percent after dropping below 50 percent in November. A reading below 50 percent generally indicates a decline.
New orders were up 3.4 percent from November, production was up 3.3 percent. Manufacturing employment was relatively unchanged. ISM also noted that the Prices Index is trending downward, “relieving some of the inflationary pressure that has troubled manufacturing since the middle of 2003.”
Manufacturers’ inventories decreased 1.3 percent from the previous month. The Customers’ Inventories Index was 50.5 percent, the same as November, which indicates that survey respondents believe customer inventories are too high. Manufacturers’ order backlogs contracted for the fourth straight month. The full report is available at www.ism.ws/.