Manufacturing PMI Ends Year at 15-Month Low

Report after report are pointing to tangible easing in manufacturing activity and optimism at year-end, the likely result of falling oil prices but also tough comparisons with prior strength. The manufacturing PMI ended December at a 15-month low of 53.8 vs a mid-month reading of 53.9 and 55.3 for the month of November.

December employment for the PMI sample was the softest in 18 months with both production as well as overall optimism at 15-month lows. The easing is reflected in inflation pressures as growth in input costs was the softest in 11 months and traction in selling prices the softest of 2018.

But there is some good news in orders as backlogs continue to rise which is a positive indication for future employment. And though growth in new orders was the weakest in 16 months, export orders rose to their best level in 12 months.

This report as well as a run of regional data from Richmond, Kansas City and especially Dallas all point to trouble for December as the manufacturing sector appears to have ended a very strong year on a very soft note.