ISM manufacturing index Dec 2021
  • Data:
  • New orders 60.4 vs 61.5 prior
  • Prices paid 68.2 vs 79.5 expected (prior 82.4)
  • Employment 54.2 vs 53.5 expected
  • Inventories vs 56.8 prior
  • Production 59.2 vs 61.5 prior
  • Backlog of orders 62.8 vs 61.9 prior
  • Supplier deliveries 64.9 vs 72.2 prior
  • Customer inventories 31.7 vs 25.1 prior
  • New export orders 53.6 vs 54.0 prior
  • Imports 53.8 vs 52.6 prior
  • Sentiment around manufacturing is rock solid at the moment with demand in almost every industry outpacing supply. The main question is how aggressively price hikes are passed down the chain.
  • The prices paid number is a bit of a surprise and is likely what's weighing on yields. It's important to keep in mind how this survey works, it measures the monthly change. Anything over 50 is expansion. So 82.4 to 68.2 isn't a fall in prices but represents a smaller percentage of firms seeing input prices rising; that makes sense given the fall in energy and steel prices recently.

    • Comments in the report:

    • “Chemical supply chains are filling very slowly. Still not full, but (my) gut feeling says it’s getting easier to source chemical raw materials.” [Chemical Products]
    • “Continued strong demand has our production facilities producing as many vehicles as we have materials for; however, capacity is limited due to the global chip shortage.” [Transportation Equipment]
    • “Lowered oil prices due to (the) omicron variant has caused concern around production and capital spend in 2022.” [Petroleum & Coal Products]
    • “Labor is still tight, and turnover continues. Supply chain issues are is still causing customer order cuts. Trucks are scarce, and the teams are burned out from working long hours and dealing with supply constraints daily.” [Food, Beverage & Tobacco Products]
    • “Price increases appear to be slowing. Lead times are shrinking slowly, and inventories are growing. I hope we have reached the top of the hill to start down a gentle slope that lets us get back to something that resembles normal.” [Fabricated Metal Products]
    • “Business continues to be good, with strong incoming orders from customers. Continue to battle labor, material and transportation pressures.” [Furniture & Related Products]
    • “Construction projects for 2022 and 2023 look very strong for us.” [Nonmetallic Mineral Products]
    • “Costs for steel seem to be coming down some. We have seen a little relief on steel prices, but they are still very high. Overall performance by suppliers has improved. On-time deliveries have improved.” [Machinery]
    • “Supply chain interruptions have dramatically increased in the fourth quarter. Many of our suppliers are unable to deliver product until January or February 2022 or later.” [Miscellaneous Manufacturing]
    • “Very robust order activity. Backlog increased. Plastic raw material shortages impact orders.” [Plastics & Rubber Products]