December manufacturing PMI shows economic trouble

Sean Proctor | Bloomberg | Getty Images

An employee works on the line at the Ford Motor Co. Dearborn Truck Plant in Dearborn, Michigan, Sept. 27, 2018.

The first survey of December’s economic data came out on Wednesday with diminished results: United States manufacturer growth hit new lows on multiple fronts last month.

Results from financial data firm IHS Markit showed the U.S. manufacturing PMI (Purchasing Managers Index) was 53.8 in December, falling nearly 2 points from 55.3 in November. This represents a 15-month low for the index, while job creation also slowed to an 18-month low.

“Output and order books grew at the slowest rates for over a year and optimism about the outlook slumped to its gloomiest for over two years,” said Chris Williamson, Markit’s chief business economist. “Some of the weakness is due to capacity constraints, with producers again reporting widespread difficulties in finding suitable staff and sourcing sufficient quantities of inputs.”

“However, the survey also revealed signs of slower demand growth from customers, as well as rising concerns over the impact of tariffs. Just over two thirds of manufacturers reporting higher costs attributed the rise in prices to tariffs,” Williamson added.

Manufacturers’ confidence in business also slipped to the lowest level in nearly two years, Markit said, with optimism at its lowest level since October 2016. The firm reported manufacturer optimism was hit by concern about “the longevity of new business growth.”