US manufacturing down fifth month in a row

Manufacturing has ended 2019 on a mixed note in the world’s largest economy.

The Institute for Supply Management (ISM) released its last Manufacturing PMI for 2019 on January 3, with the index reading 47.2, indicating a contraction in the sector. While the overall economy grew, the result for manufacturing was the lowest since June 2009, and the fifth consecutive negative reading for the US.

Drawing down the activity index were new orders, production, employment, and backlog of orders. Supplier deliveries, and prices, however, recorded a positive figure, increasingly by 2.6 and 5 percentage points respectively.

When broken down by sector, three manufacturing segments reported growth in December, 2019: food, beverage, and tobacco; miscellaneous manufacturing; and computer and electronic products.

Chair of the Institute for Supply Management, Timothy Fiore, noted that external factors were the primary reason for the negative figures.

“Global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the phase-one trade agreement between the U.S. and China. Among the six big industry sectors, Food, Beverage & Tobacco Products remains the strongest, while Transportation Equipment is the weakest. Overall, sentiment this month is marginally positive regarding near-term growth,” he said.

Bucking this trend, European aircraft manufacturer Airbus announced that it would increase its presence in the US. On January 9, the company said that it would expand its manufacturing base in Mobile, Alabama. The growth will be used to increase the number of A320 aircraft that can be produced at the site to 63 aircraft per month by 2021.

Airbus Americas chairman and CEO, C. Jeffrey Knittel, highlighted that this expansion came as a result of support from local leaders.

“We have invested more than $1 billion in Mobile because of the terrific team of employees there – and because of the support and welcome we continue to receive from the Gulf Coast community and State and Congressional leaders like Senator Richard Shelby, who has been with us from the beginning.”