ISM(R) 's Employment Index registered 53.1 percent in December, an increase of 0.8 percentage point when compared to the November reading of 52.3 percent, indicating growth in employment in December for the third consecutive month and a new high reading for the year. An Employment Index above 50.6 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, the nine industries reporting employment growth in December -- listed in order -- are: Textile Mills; Printing & Related Support Activities; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Primary Metals; Paper Products; Machinery; Computer & Electronic Products; and Chemical Products. The six industries reporting a decrease in employment in December -- listed in order -- are: Apparel, Leather & Allied Products; Fabricated Metal Products; Plastics & Rubber Products; Transportation Equipment; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components.

Employment %Higher %Same %Lower Net Index

Dec 2016 15 73 12 +3 53.1

Nov 2016 15 72 13 +2 52.3

Oct 2016 20 62 18 +2 52.9

Sep 2016 17 63 20 -3 49.7

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in December as the Supplier Deliveries Index registered 52.9 percent, which is 2.8 percentage points lower than the 55.7 percent reported for November. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The six industries reporting slower supplier deliveries in December -- listed in order -- are: Fabricated Metal Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Machinery. The four industries reporting faster supplier deliveries in December are: Miscellaneous Manufacturing; Petroleum & Coal Products; Plastics & Rubber Products; and Chemical Products. Eight industries reported no change in supplier deliveries in December compared to November.

Supplier Deliveries %Slower %Same %Faster Net Index

Dec 2016 9 86 5 +4 52.9

Nov 2016 11 86 3 +8 55.7

Oct 2016 8 87 5 +3 52.2

Sep 2016 8 85 7 +1 50.3

Inventories*

The Inventories Index registered 47 percent in December, which is a decrease of 2 percentage points when compared to the 49 percent reported for November, indicating raw materials inventories are contracting in December for the 18th consecutive month. An Inventories Index greater than 42.8 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The five industries reporting higher inventories in December are: Primary Metals; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Fabricated Metal Products; and Machinery. The 11 industries reporting lower inventories in December -- listed in order -- are: Textile Mills; Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Transportation Equipment; Paper Products; Miscellaneous Manufacturing; and Chemical Products.

Inventories %Higher %Same %Lower Net Index

Dec 2016 17 60 23 -6 47.0

Nov 2016 15 68 17 -2 49.0

Oct 2016 16 63 21 -5 47.5

Sep 2016 16 67 17 -1 49.5

Customers' Inventories*

ISM(R) 's Customers' Inventories Index registered 49 percent in December, which is the same reading as reported for November, indicating that customers' inventory levels are considered too low in December for the third consecutive month.

The five manufacturing industries reporting customers' inventories as being too high during the month of December are: Paper Products; Furniture & Related Products; Transportation Equipment; Food, Beverage & Tobacco Products; and Fabricated Metal Products. The six industries reporting customers' inventories as too low during December -- listed in order -- are: Textile Mills; Plastics & Rubber Products; Miscellaneous Manufacturing; Machinery; Chemical Products; and Computer & Electronic Products.

Customers'

Inventories % Reporting %Too High %About Right %Too Low Net Index

Dec 2016 54 12 74 14 -2 49.0

Nov 2016 52 15 68 17 -2 49.0

Oct 2016 59 13 73 14 -1 49.5

Sep 2016 58 17 72 11 +6 53.0

Prices*

The ISM(R) Prices Index registered 65.5 percent in December, an increase of 11 percentage points when compared to the November reading of 54.5 percent, indicating an increase in raw materials prices for the 10th consecutive month. In December, 38 percent of respondents reported paying higher prices, 7 percent reported paying lower prices, and 55 percent of supply executives reported paying the same prices as in November. A Prices Index above 52.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

Of the 18 manufacturing industries, the 14 industries that reported paying increased prices for its raw materials in December -- listed in order -- are: Fabricated Metal Products; Primary Metals; Electrical Equipment, Appliances & Components; Furniture & Related Products; Nonmetallic Mineral Products; Paper Products; Petroleum & Coal Products; Plastics & Rubber Products; Machinery; Miscellaneous Manufacturing; Chemical Products; Transportation Equipment; Computer & Electronic Products; and Food, Beverage & Tobacco Products. The only industry reporting paying lower prices during the month of December is Apparel, Leather & Allied Products.

Prices %Higher %Same %Lower Net Index

Dec 2016 38 55 7 +31 65.5

Nov 2016 21 67 12 +9 54.5

Oct 2016 25 59 16 +9 54.5

Sep 2016 20 66 14 +653.0

Backlog of Orders*

ISM(R) 's Backlog of Orders Index registered 49 percent in December, the same reading as reported for November, indicating contraction in order backlogs for the sixth consecutive month. Of the 88 percent of respondents who reported their backlog of orders, 21 percent reported greater backlogs, 23 percent reported smaller backlogs, and 56 percent reported no change from November.

The six industries reporting growth in order backlogs in December -- listed in order -- are: Fabricated Metal Products; Primary Metals; Paper Products; Machinery; Computer & Electronic Products; and Electrical Equipment, Appliances & Components. The six industries reporting a decrease in order backlogs during December -- listed in order -- are: Furniture & Related Products; Chemical Products; Transportation Equipment; Plastics & Rubber Products; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing. Six industries reported no change in order backlogs in December compared to November.

Backlog of Orders % Reporting %Greater %Same %Less Net Index

Dec 2016 88 21 56 23 -2 49.0

Nov 2016 87 21 56 23 -2 49.0

Oct 2016 88 16 59 25 -9 45.5

Sep 2016 87 19 61 20 -1 49.5

New Export Orders*

ISM(R) 's New Export Orders Index registered 56 percent in December, an increase of 4 percentage points when compared to the 52 percent reported for November, indicating growth in new export orders for the 10th consecutive month.

The 11 industries reporting growth in new export orders in December -- listed in order -- are: Petroleum & Coal Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Paper Products; Chemical Products; Computer & Electronic Products; Fabricated Metal Products; Machinery; and Transportation Equipment. None of the 18 industries reported a decrease in new export orders during December. Six industries reported no change in new export orders in December compared to November.

New Export Orders % Reporting %Higher %Same %Lower Net Index

Dec 2016 80 17 78 5 +12 56.0

Nov 2016 82 13 78 9 +4 52.0

Oct 2016 79 12 81 7 +5 52.5

Sep 2016 76 15 74 11 +4 52.0

Imports*

ISM(R) 's Imports Index registered 50.5 percent in December, the same reading as reported for November. This month's reading indicates growth in imports for the third consecutive month.

The five industries reporting growth in imports during the month of December are: Plastics & Rubber Products; Primary Metals; Furniture & Related Products; Miscellaneous Manufacturing; and Machinery. The five industries reporting a decrease in imports during December are: Apparel, Leather & Allied Products; Fabricated Metal Products; Chemical Products; Transportation Equipment; and Food, Beverage & Tobacco Products. Seven industries reported no change in imports in December compared to November.

Imports % Reporting %Higher %Same %Lower Net Index

Dec 2016 83 10 81 9 +1 50.5

Nov 2016 82 11 79 10 +1 50.5

Oct 2016 81 11 82 7 +4 52.0

Sep 2016 81 12 74 14 -2 49.0

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January 03, 2017 10:15 ET (15:15 GMT)

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