The Industrial Supply Association posted its December Economic Indicator report on Tuesday, showing declines in its November Distributor and Manufacturer indexes despite healthy growth in the Purchasing Managers Index (PMI).
ISA's Manufacturers Index had a reading of 61.4, down from a year-high 68.0 in October, while its Distributors Index reading of 53.5 was its second-lowest of the year and a sizable drop from October's mark of 64.9. The Institute of Supply Management's December PMI reading of 53.2 was a 1.3-point gain from October. 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.
November's readings indicate continued expansion for ISA distributors and manufacturers, though at a notably slower rate than October, while the overall manufacturing economy continues to improve. The December PMI is tied for its highest reading of 2016 (June).
Distributors' largest indicated declining factors were in New Orders (64.9 in October to 29.2 in November), Business Activity (50.0 to 29.2) and Sales Revenue (55.6 to 20.8). Gaining factors were Employment (64.8 to 70.8), Supplier Deliveries (88.9 to 100.0), Inventories (72.2 to 83.3) and Imports (75.0 to 100.0). Distributors' Anticipated Business Conditions and Anticipated New Orders also showed modest growth.