ISM Manufacturing Index Rises, Beats Estimates

Headlined by a 14-year high for new orders, ISM's manufacturing index rose 1.5 points to 59.7 in December to just top Econoday's high estimate. New orders posted their 7th straight plus 60 reading and nearly broke 70 at 69.4 with backlog orders up 1 point to 56.0 which is very strong for this reading. Backing up the order strength are new export orders which are up 2.5 points to 58.5 which is very strong for this reading also.

Production is up and inventories are being drawn down. Adding to the headline strength are once again lengthening in delivery times which is consistent with demand-related congestion in the supply chain. Input prices remain very elevated.

This report, like most private and regional surveys, has been far outstripping the strength in definitive factory data which however have also been coming alive in recent months. The factory sector looks to have ended 2017 on the upswing which will be a positive for fourth-quarter GDP.

Recent History Of This Indicator:
The ISM manufacturing index had been surging dramatically most of the year, beating Econoday's consensus for five straight months from May to September when it peaked at 60.8. But the index failed to meet expectations in both October and November largely, however, due to post-hurricane improvement in delivery times (which is a negative in the index's calculation). New orders as well as employment have in fact remained unusually strong. The Econoday consensus for December is 58.1 vs 58.2 in the last report.