The manufacturing sector grew again in December after a one-month decline, as the overall economy posted its 62nd consecutive month of expansion.
The Institute for Supply management said on Wednesday that its manufacturing index reached 51.4 percentage points in December - above the 50 percent mark dividing expansion from contraction - compared to 49.5 percent in November.
Both New Orders and Production made significant gains to drive the PMI back above the breakeven point, said Norbert J. Ore, the chair of ISM.
The latest figures represent a three month high for factory production. The early part of 2006 had been market by consistent growth, with the first eight months of the index measuring above 53 percentage points. Since that time, however manufacturing activity slowed to 52.9 percent in September and 51.2 percent in October.
The institute reported growth in new orders again, with the index registering 52.1 percentage points in December, 3.4 percentage points higher than the 48.7 posted in November. Production was also up in December to 51.8 percentage points, compared to the 48.5 percentage points recorded in November.
Meanwhile, factory employment remained relatively unchanged for the second consecutive month. There were also signs that prices are rising at a slower rate. ISM's price index slowed to 47.5 percent in December from 53.5 percent in November.
The Prices Index is trending downward, relieving some of the inflationary pressure that has troubled manufacturing since the middle of 2003, Ore said.
The top three industries reporting growth in December were Apparel, Leather & Allied Products; Printing & Related Activities; and Plastics & Rubber Products.