By Xavier Fontdegloria
U.S. manufacturing activity lost some momentum in December as demand cooled, but factories reported signs of easing supply-chain bottlenecks, according to data from a survey of purchasing managers released Monday.
The IHS Markit final U.S. manufacturing PMI came in at 57.7 in December, down from 58.3 in November, and broadly in line with the preliminary estimate of 57.8. A reading above 50 indicates expansion in the manufacturing sector.
Factories across the U.S. are humming on strong demand for goods, but severe supply-chain bottlenecks hamper the procurement of inputs and constrain production.
In December, companies reported subdued output growth, a slowdown in new orders and a further deterioration in vendor performance due to severe material shortages, the report said.
"Adding to the sector's challenges was an ebb in client demand from the highs seen earlier in 2021, with new orders rising at the slowest pace for a year, largely linked to a reluctance at customers to place orders before inventories were worked through," said Sian Jones, senior economist at IHS Markit.
Even though shortages and supply delays persisted, the data signaled that supply chains deteriorated to the smallest extent since May, the report said.
Costs for good producers continued to increase due to higher transportation and freight fees and shortages of inputs, but the pace in which prices rose was the softest for six months.
"While shortages remained significant, the end of the year brought with it some signs that cost pressures have eased," Ms. Jones said.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
01-03-22 1019ET
