The ISM Manufacturing Index moved lower by 2.4 points in December, yet the Index remains at a historically strong reading of 58.7, as many of the supply/demand imbalances in the manufacturing sector began to normalize last month.
Most notably, both the Prices Paid and the Customer Inventories figures moved sharply back to more normalized readings – an indication that ongoing supply chain dysfunction may be starting to resolve. The improvement of these extremes last month was a welcome development; however, these components are still at historically extreme readings, and the Institute for Supply Management emphasizes that they continue to pose major challenges for manufacturers: “Shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products continue to plague reliable consumption.”
