U.S. MANUFACTURING PMI SOLID AT YEAREND

The final Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) was 54.0 in December, down slightly from the flash estimate of 54.2, and signalled a further expansion of the U.S. manufacturing sector. Moreover, up from 52.8 in November, the headline PMI indicated the strongest rate of growth since May.

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Manufacturing output increased at the strongest rate in seven months during December. The rate of growth was solid, albeit weaker than that imagepreviously estimated by flash PMI data. All three market groups saw higher levels of production, with manufacturers of intermediate goods posting the strongest rate of increase overall.

Firms generally linked the rise in output to larger new work intakes. One-in-five companies reported an increase in new orders, with the overall rate of growth the fastest since April. Moreover, new export orders increased for the second month running and at the strongest pace since March. Anecdotal evidence attributed the rise in new orders to recent product launches and greater client demand, linked to increased marketing.

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Manufacturing employment in the U.S. increased further in December, with approximately 12% of firms hiring additional staff since November. Overall, the rate of job creation was solid and the strongest in eight months. Although staffing levels increased only marginally in the consumer goods market, moderate growth was reported by produces of intermediate and investment goods.

Reflective of the increase in new orders, manufacturers bought a larger quantity of inputs in December. Stocks of purchases, meanwhile, were largely unchanged since November. Overall, purchasing volumes increased at a solid rate and partly contributed to a further lengthening of suppliers’ delivery times.

Firms reported higher input prices in December, with raw materials such as steel particularly mentioned as having risen in cost. Overall, the rate of inflation was marked, albeit weaker than in November. Panellists passed on greater costs to clients by raising their selling prices. Output charges have risen for four consecutive months, with the latest increase the greatest since April.

Large manufacturers that have more than 500 employees reported the fastest rate of new order growth in December. Total new work intakes rose solidly since November, and partly reflected the first rise in their new export orders in three months.

Meanwhile, small-sized manufacturing companies (less than 100 in headcount) posted the strongest increase in both output and employment during the latest survey period. Moreover, the rates of growth quickened over the month, with the latest rise in production the fastest since July.

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