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Manufacturing expanded slightly in December, with
the Institute for Supply Management’s (ISM)
PMI registering 50.7 percent -- from 49.5 percent in November (50 percent is
the breakpoint between contraction and expansion). “Comments from
the [respondent] panel this month are mixed, with some indicating a
strengthening of demand and others indicating a continuing softness in demand,”
observed Bradley Holcomb, chair of ISM’s Manufacturing Business Survey
Committee. “Additionally, many respondents express uncertainty about government
regulations, taxes and global economics in general as we approach 2013.”
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The
service sector report was even more upbeat. The non-manufacturing index (now
known simply as the “NMI”) registered 56.1 percent in December, 1.4 percentage
point higher than November’s 54.7 percent -- indicating faster growth. “Respondents'
comments remain mixed,” said Anthony Nieves, chair of ISM’s Non-manufacturing
Business Survey Committee, “and are mostly positive about business conditions
and the economy.”
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Wood Products reported expanded
activity, although higher employment and backlogged orders were the only
contributing categories. Paper Products’ expansion, on the other hand, was
supported from a majority of sub-indices. Overall activity expanded in Real
Estate, but the change was limited to inventories.
Construction exhibited growth in new, backlogged and export orders; and
employment and inventories. Ag & Forestry also grew, but only in new import
and export orders.
Prices
increased for a variety of commodities, including pine, spruce and treated lumber;
corrugated boxes/packaging; and caustic soda. Gasoline, diesel fuel and natural
gas were down in price. No relevant commodities were in short supply.
The foregoing comments represent the general economic
views and analysis of Delphi Advisors, and are provided solely for the purpose
of information, instruction and discourse. They do not constitute a
solicitation or recommendation regarding any investment.
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