US Manufacturing PMI (flash) decreased to 57.8 in December from 58.3 in November, below analysts’ expectations of 58.5.
The reading pointed to the slowest growth in factory activity in a year. Although the pace of output growth quickened to the fastest for three months, the rate of expansion was muted compared to those seen earlier in the year as material shortages – although easing to the lowest since May, as measured by suppliers’ delivery times – hampered production again. The rate of job creation quickened to the fastest since June, but numerous panellists stated that problems finding and retaining staff persisted. Input prices continued to rise at a marked pace, offering firms little respite from inflationary pressure amid greater transportation, distribution and material costs. Output charges also rose sharply, albeit at the softest rate since April. Finally, output expectations for the year ahead were the greatest for four months.
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Open account Try demo Download mobile app Download mobile appUS Services PMI (flash) dropped to 57.5 in December from 58.0 in the previous month, missing market consensus of 58.4.
Chief Business Economist at IHS Markit, said: “The survey data paint a picture of an economy showing encouraging resilience to rising virus infection rates and worries over the Omicron variant. Business growth slipped only slightly during the month and held up especially well in the vulnerable service sector. Manufacturing output growth even picked up slightly amid a marked easing in the number of supply chain delays, which also helped to take pressure off raw material prices. Barring the initial price slide seen at the start of the pandemic, December saw the steepest fall in factory input price inflation for nearly a decade. “The worry is that rising wage growth, greater transport costs and higher energy prices have pushed service sector cost inflation to a new high, and that any renewed disruption to global supply lines resulting from the Omicron wave could lead to renewed upward pressure on goods prices.”
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