The Inventories Index registered 47 percent in December, which is 3.5 percentage points lower than the 50.5 percent reported in November. This month's reading indicates that respondents are reporting inventories are contracting, following two consecutive months of growth in raw materials inventories. An Inventories Index greater than 42.7 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: Wood Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Furniture & Related Products; Paper Products; Computer & Electronic Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. The six industries reporting decreases in inventories in December — listed in order — are: Apparel, Leather & Allied Products; Machinery; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; and Chemical Products.

Customers' Inventories*

The ISM Customers' Inventories Index registered 47.5 percent in December, which is 2.5 percentage points higher than in November when the index registered 45 percent. This month's reading indicates that customers' inventories are considered too low, but higher than reported in November. Customers' inventories have registered at or below 50 percent for 57 consecutive months. A reading below 50 percent indicates customers' inventories are considered too low.

The five manufacturing industries reporting customers' inventories as being too high during the month of December are: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; and Fabricated Metal Products. The eight industries reporting customers' inventories as too low during December — listed in order — are: Plastics & Rubber Products; Primary Metals; Machinery; Computer & Electronic Products; Paper Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; and Transportation Equipment.

Prices*

The ISM Prices Index registered 53.5 percent in December, which is an increase of 1 percentage point compared to the November reading of 52.5 percent. This month's reading indicates an increase in raw materials prices for the fifth consecutive month. In December, 20 percent of respondents reported paying higher prices, 13 percent reported paying lower prices, and 67 percent of supply executives reported paying the same prices as in November. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.

Of the 18 manufacturing industries, seven reported paying increased prices during the month of December in the following order: Printing & Related Support Activities; Plastics & Rubber Products; Primary Metals; Furniture & Related Products; Fabricated Metal Products; Machinery; and Transportation Equipment. The six industries reporting paying lower prices during December — listed in order — are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; and Computer & Electronic Products.