ISM Manufacturing Index | Values > 50 = Expansion
The nation’s manufacturing sector ended the year on a positive note as the Institute for Supply Management’s purchasing managers index rose to 57.0 in December, its highest level since May. Index values above 50 reflect an expanding manufacturing sector, while values below 50 indicate contraction. The index is a composite of nine sub-indexes including new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export orders and import orders. New orders, a leading indicator of production, rose to 60.9, a positive sign for continued growth over the next few months. This is particularly good news because it suggests that demand for manufactured goods will be sustained beyond the inventory correction cycle in late 2009 and the first half of 2010 – a period when businesses restocked following the inventory drawdown during the recession. The ongoing expansion, which is being fueled by exports and moderately strong domestic sales activity, will generate demand for industrial space, bolstering the market recovery that began in the second half of last year.