December 2009 PMI shows 5th straight month of manufacturing growth

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The latest Institute of Supply Management (ISM) report on manufacturing, issued last week, finds that the PMI rose for the 5th consecutive month in December 2009 to 55.9%. New orders, production and employment were up, while inventories contracted and supplier deliveries slowed. The full report can be found on the ISM website.

Long considered one of the leading economic indicators, the PMI looks at the state of new orders, production, supplier deliveries, inventories and employment. ISM collects data in each area from supply executives at more than 400 industrial companies representing 20 industries across all 50 states, and then analyzes it to determine whether each area is improving or worsening. A PMI of 50% or above is generally considered a sign that the manufacturing economy is growing.

The Overview of the Manufacturing Report on Business (ROB) on the ISM website offers a full explanation of the PMI.

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