Manufacturing conditions remain strong for December, according to a Markit Flash U.S. Manufacturing Purchasing Managers' Index (PMI) report (link opens pdf file) released today. November's final report put the index at a 20-month peak, and these latest estimates keep the index just 0.3 percentage points below at 54.4%.
The "flash" estimate is typically based on approximately 85%-90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data. An above-50 reading denotes general growth, while below 50 signals contraction.
This month's report showed continued expansion across almost all indicators except inventories. New orders growth fell slightly from 56.2% to 54.5%, while new export orders remained unchanged at 51.4%. In a potentially positive sign for long-term growth, employment added another 1.4 percentage points to clock in at 53.7%. Stocks of purchases and finished goods both continued to contract, but at slower rates than in November.
Analysts were slightly disappointed by the report, having expected December's flash index to beat November's high to reach 55%.
"Over the fourth quarter as a whole, manufacturing has enjoyed its best performance since the start of the year," said Markit Chief Economist Chris Williamson in a statement today. "The survey is yet another indication that the U.S. economy has shown greater than expected resilience to the headwinds of the uncertainty caused by the government shutdown and debt crisis, and will add to the likelihood of the Fed tapering its huge stimulus of $85bn per month asset purchases sooner rather than later."