The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index (PMI) registered 55.1 in December, up from 53.9 in November. The latest index reading was the highest since March 2015 and signaled a solid improvement in the health of the sector. December data also rounded off the strongest quarterly performance since the start of 2015. Output at manufacturers expanded at a steep pace in December, with growth reaching an eleven-month high. Panelists attributed greater production to more favorable demand conditions and increased new order volumes.
Backlogs meanwhile increased at the quickest rate since October 2015 to indicate ongoing capacity pressures. Supply chain delays and increased global demand for inputs pushed costs up further, with the rate of cost inflation remaining sharp overall. Charge inflation, however, softened. Business confidence remained robust, driven by more favorable demand conditions.