US manufacturing grew in December for the 17th month, capping a strong year in the sector that is leading the economic recovery from recession, according to a key industry survey released Monday.
The Institute of Supply Management (ISM) said its manufacturing purchasing managers index rose to 57.0 percent last month, the best reading since May,
“All told, the December ISM index is consistent with a manufacturing industry on solid footing and an economy that reaccelerated in the fourth quarter,” said Ryan Sweet at Moody’s Analytics.
The pace was slightly weaker than the analyst consensus forecast of a rise to 57.3 percent following November’s 56.6 percent reading.
A number above 50 percent indicates expansion.
“We saw significant recovery for much of the US manufacturing sector in 2010,” Norbert Ore, head of the ISM manufacturing business survey committee, said in a statement.
Ore noted the recovery was focused on strength in autos, metals, food, machinery, computers and electronics, while industries tied primarily to the devastated housing sector continued to struggle.
“December’s strong readings in new orders and production, combined with positive comments from the panel, should create momentum as we go into the first quarter of 2011,” Ore said.
New orders rose 4.3 percentage points from November and production jumped 5.7 points, the ISM said.
The ISM prices index surged to 72.5 percent in December, up 3.0 points from November, as prices rose on all reported commodities, excluding natural gas.
The employment index, however, slipped 1.8 points to 55.7 percent.
“The employment index was disappointing, falling from 57.5 to 55.7 for December. The decline does leave us comfortable with the forecast for manufacturing payrolls to have declined for a fifth consecutive month in December,” Moody’s analyst Sweet said.
The keenly awaited official December jobs market data is due Friday. High unemployment and depressed home values are posing stiff challenges to getting the recovery on a sustainable track.
Most analysts expect the Labor Department will report the unemployment rate slipped to 9.7 percent from 9.8 percent in November, and the economy created 135,000 nonfarm jobs, up from a paltry 39,000 the prior month.