Industrial Insight

good news… | January 4, 2011

John E. Silvia, Chief Economist

ISM: Still a Growth Story—Prices Suggest Input Cost Pressures
December’s ISM came in at 57.0 with continued growth signals from production, orders and employment. Export orders were also positive. Prices paid suggest input cost pressures from metals and chemicals.

New Orders and Employment Are Both in Expansion Mode
ISM’s new orders index came in at 60.9 which suggests continued growth. The breakeven level for orders is 50.2 which is consistent with an increase in the Census Bureau’s series on manufacturing orders. We expect equipment & software spending to grow in double digits in 2011.
Ten industries reported a gain in orders with improvement in such core sectors as fabricated metals, computers & electronic products, machinery and electrical equipment. New export orders remained in expansion mode for the 18th straight month. Eight industries showed improvement.
Employment, according to the ISM, came in at 55.7 and has been above breakeven for the last thirteen months. This supports our expectation that job growth will pick up in 2011 at a pace of 160,000 plus for the year.


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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.







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