US manufacturers grow slower in December than they have been in 11 months, as Omicron strikes


The payment: American manufacturers reached their slowest rate of growth in eleven months in December as they dealt with persistent labor and material shortages and a new attack from the Omikron strain of coronavirus.

A closely-followed index of US-based manufacturers fell to 58.7% in the final month of 2021, compared to 61.1% in November, the Institute for Supply Management said on Tuesday.

Any number over 50% indicates expansion and readings over 60% are considered exceptional.

Economists polled by the Wall Street Journal had forecast the index to drop to 60%.

The ISM results come from a survey of senior executives. The index tends to provide a good snapshot of the state of the US economy.

Big picture: Manufacturers are in high demand for new cars, electronics, furniture and the like, but they are likely to remain under pressure until all bottlenecks have subsided.

Omicron doesn’t help. The highly contagious burden will likely make it harder for manufacturers to keep production lines running at full speed as employees will become unemployed after contracting the virus. However, they are less affected by the coronavirus than companies that deal with face-to-face customers.

Market reaction: The Dow Jones Industrial Average DJIA,
+ 0.76%
and S&P 500 SPX,
+ 0.20%
expanded profits in Tuesday trades according to the report.


Comments are closed.