Economist's Insights

ISM Manufacturing PMI Points to Strong 2017 Close, Positive Momentum to Start 2018

Jan 3, 2018

The ISM’s manufacturing index rose unexpectedly in December to reclaim a portion of the ground lost in the last two reports. The headline index improved to from 58.2, where it was expected to hold unchanged, to 59.7, its second strongest level since 2011 and third strongest since the Summer of 2004. The details of the report were solid across the board. The softest spot of the report was a third monthly decline in the employment index. However, excluding some stronger measures earlier in 2017, the index printed its best print since 2012 signaling continued strength in hiring by manufacturers. Almost all of the changes in the other indices were growth positive. The new orders index saw the strongest improvement, jumping to its best level since 2004. Backlogged orders and new export orders were also stronger. The production index also picked up to reach its highest level since 2010 and second highest since 2004.