Inventories
The Inventories Index registered 51.6 percent in December, 0.4 percentage point higher than the 51.2 percent reported for November. Inventories grew for a third consecutive month after three months of contraction. "Inventory growth stability in light of ongoing supplier constraints indicates that supply chains are meeting near-term production demand, in spite of transportation and COVID-19 headwinds," says Fiore. An Inventories Index greater than 44.3 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The eight industries reporting higher inventories in December — listed in order — are: Apparel, Leather & Allied Products; Wood Products; Textile Mills; Paper Products; Machinery; Chemical Products; Fabricated Metal Products; and Transportation Equipment. The seven industries reporting a decrease in inventories in December — listed in order — are: Printing & Related Support Activities; Primary Metals; Furniture & Related Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; and Food, Beverage & Tobacco Products.

Customers' Inventories^�nbsp;
ISM^®'s Customers' Inventories Index registered 37.9 percent in December, 1.6 percentage points higher than the 36.3 percent reported for November, indicating that customers' inventory levels were considered too low. "Customers' inventories are too low for the 51st consecutive month, a positive for future production growth. For five months in a row, the index has been at its lowest levels in more than a decade (a reading of 35.8 percent in June 2010). However, the drop into 'too low' territory slowed in December," says Fiore.

Of the 18 industries, the only one reporting higher customers' inventories in December is Printing & Related Support Activities. The 14 industries reporting customers' inventories as too low during December — listed in order — are: Wood Products; Primary Metals; Textile Mills; Plastics & Rubber Products; Furniture & Related Products; Fabricated Metal Products; Machinery; Electrical Equipment, Appliances & Components; Transportation Equipment; Nonmetallic Mineral Products; Computer & Electronic Products; Chemical Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products.

Prices^�nbsp;
The ISM^® Prices Index registered 77.6 percent, an increase of 12.2 percentage points compared to the November reading of 65.4 percent, indicating raw materials prices increased for the seventh consecutive month. The index achieved its highest reading since May 2018, when it registered 79.5 points. "Aluminum, copper, steel, petroleum-based products including plastics, transportation costs, electronic components, corrugate, temporary labor, wood and lumber products all continued to record price increases," says Fiore. A Prices Index above 52.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

All 18 industries reported paying increased prices for raw materials in December, in the following order: Apparel, Leather & Allied Products; Petroleum & Coal Products; Wood Products; Paper Products; Fabricated Metal Products; Furniture & Related Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Machinery; Printing & Related Support Activities; Miscellaneous Manufacturing; Chemical Products; Transportation Equipment; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; and Textile Mills.

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