ISA Distributor Index Ticks Up In December, Mfg. Index Dips

ISA Distributor members ended the year with an increase in activity expansion while suppliers dipped as the overall U.S. industrial economy grew for a third straight month.

The Industrial Supply Association posted its January Economic Indicator report on Tuesday, showing a slight increase in its Distributor Index and slight decrease in its Manufacturing Index as Purchasing Managers Index (PMI) continued to rise.

ISA's Distributors Index had a December reading of 54.6, up from November's 53.5. The Manufacturer's Index checked in at 58.0, down from November's 61.4. The Institute of Supply Chain Management's December PMI had a reading of 54.7, up another 1.5 points from November. It was the third straight month of PMI growth since a mark of 49.4 in September. The PMI is regarded as a good indicator of the overall U.S. manufacturing economy.

For all three indexes, a reading above 50 percent indicates expansion, while a reading below 50 indicates contraction.

December's readings indicate continued expansion for distributors and manufacturers, with a slightly faster rate of expansion for distributors and slightly slower for manufacturers while the overall manufacturing economy continues to improve. The December PMI was its highest of 2016, ending the year on a strong note.

ISA Distributors' largest indicated growing factors in December were Employment (70.8 in November to 82.0 in December), Business Activity (29.2 to 34.0) and Sales Revenue (20.8 to 26.0). Declining factors were Supplier Deliveries (100.0 to 94.0), Inventories (83.3 to 70.0) and Anticipated Business Conditions/New Orders (70.8 to 56.0).

Anonymous Distributor Comments in ISA's January Economic Indicator Report included the following: 

  • "We see confidence returning to the industrial sector with the election behind us."
  • "December is always a rough month so hard to tell trajectory for the new year. November was great so hopefully we start back where we left end of November."


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