Today’s manufacturing report by the Institute for Supply Management shows that the closely-watched Purchasing Managers Index increased from 56.6 in November to 57 in December, the highest level since May. This confirms previous regional reports that the manufacturing recovery accelerated last month. The December increase was driven by sharp improvements in both new orders and production, both of which rose to a level over 60 for the first time in seven months.
While the export orders component of the report moderated to 54.5 in December from 57 in November, the fact that the export index remains substantially above where it was eighteen months into the prior recovery is a positive sign that exports continue to be a strong source of growth for manufacturers.
In the wake of the end of several fiscal stimulus programs in late spring, the manufacturing recovery had been slowing since mid-year. Today’s report is a hopeful sign that the positive momentum of the recovery is rebuilding heading in to 2011.