Tempe’s ISM says US manufacturing eases but supply bottleneck begins to break off

On Tuesday, an ISM (Institute for Supply Management) survey report had revealed that US manufacturing activity had eased last month

by Sourav D
Tempe’s ISM says US manufacturing eases but supply bottleneck begins to break off

On Tuesday, a survey report from ISM (Institute for Supply Management), the world’s oldest and largest supply management association having had over 50,000 members headquartered on Tempe, Arizona, had unveiled that its index for US national manufacturing activities that account for an 11.9 per cent of entire US economic activities had tumbled on December in context of a caustic demand-crunch for goods.

Nevertheless, in the latest flashpoint of an ease in Omicron associated worries across the globe, latest ISM survey report had added to a silver lining on a roaring US economy as a nearly year-long supply constraint appeared to be allaying and a gauge of investments by US factories for productions had declined to lowest in more than a decade.

Adding further comforting prospect on a US economy which is expected to eke out a lofty growth over Q4, 2021, the ISM survey data revealed earlier on Tuesday also had underscored an improvement in labor supplies, while an ISM index of factory employment surged to a fresh eight-month peak.

Nonetheless, despite a barrage of upbeat readings on US labor market with supply logjams beginning to ease, raising an alarming bell over US factory activities on first quarter of 2022, Chair of ISM manufacturing business survey committee, Timothy Fiore said in a statement following the announcement, “Shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products continue to plague reliable consumption”.

Besides, adding further holocaust on US factory activities with voluntary job quits hitting a record high later last year, a senior economist at FHN Financial in New York, Will Compernolle said, “There's still a lot of ground to make up before supply chains fully normalize, but cooling prices and increased employment are positive signs”.

US factory activities fall to lowest since January 2021

According to latest ISM survey report, the Tempe, Arizona-based supply management association’s index for national manufacturing activities had faltered to 58.7 in December from a reading of 61.1 in November, bottoming to the lowest since January 2021.

Surprisingly, all of the six biggest manufacturing sectors in the United States such as chemical products, computer and electronic goods, transportation equipment, foods, petroleum and coal alongside fabricated metal products, had reported strong gains in December.