Very strong report:
At 54.2, the Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) signalled a solid improvement in U.S. manufacturing business conditions during December. Up from 52.8 in November, the ‘flash’ PMI reading, which is based on around 85% of usual monthly replies, indicated the strongest rate of growth for eight months.
Manufacturing output rose at its fastest pace since April, the rate of growth having quickened for the third month running, as firms reported greater volumes of new business.
The volume of new orders received by manufacturing companies rose for the fortieth consecutive month in December, growing at the fastest rate since April. Improved marketing and recent new product launches were all seen to have helped boost demand. While the increase in new orders was to a large extent driven by better domestic demand, new export orders rose at the steepest rate since March.
Employment in the U.S. manufacturing sector rose further in December, as has been the case in each month since February 2010, with the rate of job creation picking up to the highest since April. Firms that hired additional staff over the month generally attributed this to fuller order books.
Although having eased slightly from November’s eight-month peak, the rate of input price inflation remained marked in December. Greater demand for raw materials, particularly steel, generally pushed average prices up over the month. Firms often sought to pass higher input costs to clients by raising their output charges. Average selling prices have increased for four months running, with the latest rise the strongest seen over this period.
Reflective of stronger output growth, the quantity of inputs bought by manufacturers showed the strongest rise for eight months. Meanwhile, stocks of purchases were depleted for the fifth consecutive month, although the latest reduction was only marginal. Suppliers’ delivery times nonetheless lengthened to the greatest extent since May.