U.S. Manufacturing Growth Slowed in December to 11-Month Low

The Institute for Supply Management's manufacturing Purchasing Managers Index reading fell to 58.7 in December — down 2.4 points from November.

Model year 2021 Ford Ranger trucks on the assembly line at Michigan Assembly, Monday, June 14, 2021, in Wayne, MI.
Model year 2021 Ford Ranger trucks on the assembly line at Michigan Assembly, Monday, June 14, 2021, in Wayne, MI.
AP Photo/Carlos Osorio

WASHINGTON (AP) — Growth in U.S. manufacturing slowed in December to an 11-month low with companies still combating supply chain problems.

The Institute for Supply Management, a trade group of purchasing managers, reported Tuesday that its index of manufacturing activity fell to a reading of 58.7 in December, 2.4 percentage points below the November reading of 61.1.

Any reading above 50 indicates growth in the manufacturing sector which has recorded 19 straight months of growth going back to the spring of 2020 when the pandemic hit. The December reading was the lowest since a matching 58.7 in January 2021.

The slowdown in December reflected a decline in both new orders and in production.

While the December performance still reflected strength in manufacturing, there were concerns that the current global surge in COVID-19 cases, largely the highly infectious omicron variant, could further depress manufacturing in coming months.

Omicron was only identified in late November and quickly became the dominant virus.

“The surge in domestic virus cases to more than 1 million per day could deal a more significant blow to manufacturing output as significant numbers of workers are forced to stay home,” said Andrew Hunter, senior U.S. economist at Capital Economics.

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