#30 – Inside Our Industry – Manufacturing Outlook Positive Leading into 2021Posted on
Manufacturing Outlook Positive Leading into 2021
We are very encouraged by two reports that have come out over the past couple of weeks. First, the ISM Manufacturing Index for December rose to 60.7, 3.2 percentage points above the November reading of 57.5. This represents the highest index for 2020, and the highest index since August 2018’s reading of 61.3. (A PMI above 50 would designates an overall expansion of the manufacturing economy whereas a PMI below 50 signifies a shrinking of the manufacturing economy.)
In addition, the National Association of Manufacturers fourth-quarter Manufacturers’ Outlook Survey results were released at the end of December 2020. Following are excerpts from the IndustryWeek.com press release:
Nearly three-quarters (74.2%) of manufacturers who responded characterized the business outlook as “positive,” up from 66% in the previous outlook survey. The 74.2% figure is nearly equivalent to the survey’s historical average of 74.4% and a soaring improvement over the 33.9% reported in the second quarter, NAM data show.
Nevertheless, for the year as a whole, 62.4% of manufacturers expressed a positive outlook, down from 92.4% in 2018 and 76.2% in 2019. It was also the lowest annual average since 2009, NAM shared.
“There’s no question manufacturers have rebounded since the dramatic downturn in the spring, although a return to pre-pandemic optimism is still months away,” said NAM President and CEO Jay Timmons in a press release.
As a whole, large manufacturers were more optimistic, with 81% expressing a positive outlook in the fourth quarter, compared with 68.1% of small manufacturers.
There are many unknowns as we press forward but we remain steadfast in our quest to build manufacturing in rural and non-urban America.