Economic activity in the U.S. manufacturing sector contracted in December to its lowest level in more than 10 years, according to industry figures released Friday by the Institute for Supply Management (ISM).
ISM’s Purchasing Managers’ Index registered at 47.2 percent in December, the lowest since June 2009, when it hit 46.3 percent. Index readings below 50 percent indicate a contraction.
December was the fifth straight month that the manufacturing sector contracted. In November, the index registered at 48.1 percent.
Production and employment were down, largely because of a lack of demand. But prices increased for the first time since May, which ISM Chairman Timothy Fiore said in a news release is “a positive for 2020.”
The U.S. economy has been strong overall, but manufacturing remains a weak spot, in part because of challenges as a result of President Trump‘s trade war with China.
Trump announced earlier this week that he will sign a phase one trade deal with China on Jan. 15. The agreement involves a reduction in tariffs from both Washington and Beijing and an increase in China’s purchases of U.S. agricultural products.
“Global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the phase-one trade agreement between the U.S. and China,” Fiore said.