ISM Manufacturing Index: The Institute for Supply Management’s manufacturing index moved up 0.9% (m/m) to 49.3 for December 2024; this value is weaker than the forecast of 50. The new orders sub-index scored at 52.5. The result reflected the softest pace of contraction in the US manufacturing sector since March, which was the sole period of expansion in the industry since September of 2022.

The ISM manufacturing index is based on surveys of 300 purchasing managers in 17 industries. The survey is a diffusion index calculated as a percent of responses. A value of 50 is neutral, while less than 50 denotes contracting manufacturing activity and greater than 50 denotes expanding activity.

Figure 1 breaks down the composite index and sub-indexes. The backlogs sub-index was 45.9 this month, while the inventories sub-index was 48.4.

The seven manufacturing industries reporting growth in December — listed in order — are: Primary Metals; Electrical Equipment, Appliances & Components; Wood Products; Furniture & Related Products; Paper Products; Miscellaneous Manufacturing; and Plastics & Rubber Products. The seven industries reporting contraction in December — in the following order — are: Textile Mills; Fabricated Metal Products; Printing & Related Support Activities; Machinery; Chemical Products; Transportation Equipment; and Nonmetallic Mineral Products.

“Order levels well below forecast projections.” [Fabricated Metal Products]

At Gerdau, we closely monitor the ISM manufacturing index since it is an excellent barometer of the present strength, as well as a window on the likely short-run future, of U.S. manufacturing.