American Manufacturing Registers Fastest Growth, Reveals Markit’s Purchasing Managers
American manufacturing recorded its fastest growth over the last eight months, and according to an industry survey, this was due to a marked increase in both domestic and overseas demand. This trend was recorded according to an industrial survey conducted by Markit, a financial information firm, and was released in a statement, which read, “Output and domestic new orders also hit eight-month highs, helping the sector add momentum after conditions hit a three-year low in October. The index “signaled solid improvement in the U.S. manufacturing business conditions during December.”
With a reading of 54.2 on the manufacturing Purchasing Managers Index, and which stood at 52.8 in November, it was clear that the industry is on a rebound as readings above 50 indicate expansion and thanks to the numbers in both November and this month. With new export orders rising swiftly in December, firms were also able to hire more employees and which was indicated in the Employment component of the survey rising from 52.6 in November to 54.4 this month. In stark contrast, a survey conducted by the Institute for Supply Management concluded that the market had contracted over the last two months.
However, both surveys also revealed that companies were shrinking inventories, and which could mean a future increase in activity since these inventories will have to be replenished. This growth also affected price pressure which dropped from 63.7 to 62 this month but well above numbers registered in May and October. Inflation, on the other hand, increased to 1.9 percent and which also resulted in the US Federal Reserve stating that it would keep the interest rates close to zero until the unemployment rate dropped to 6.5 percent.