The Institute for Supply Management’s manufacturing gauge edged up 0.7 point to 47.4 last month. — Reuters
NEW YORK: A measure of US factory activity remained stuck in contraction territory for a 14th month at the end of 2023, restrained by weaker orders.
The Institute for Supply Management’s (ISM) manufacturing gauge edged up 0.7 point to 47.4 last month, helped by a pickup in production, according to data released Wednesday.
Readings below 50 indicate contraction, and the figure was near economists’ expectations.
The December result extends the longest stretch of shrinking activity since 2000-2001, when the dotcom bubble burst and sparked a recession.
Manufacturers were beset last year by high borrowing costs and waning demand for goods that prompted some companies to rethink capital spending plans.
While the ISM gauge still shows contraction – and almost all industries shrank during the month – it is holding in a range that suggests activity has stabilised at a weak level.
Factory purchasing managers are more upbeat about this year’s prospects as the Federal Reserve has signaled a pivot to lower interest rates.
In the ISM’s latest semiannual economic forecast, 15 of 18 manufacturing industries project that revenue will increase, while capital expenditures are seen rising almost 12%.
“We felt that we’re going to have a good year in 2024,” Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said on a call with reporters on Wednesday.
“We’ve closed the year on a very good note.” — Bloomberg
