New data reveals that manufacturing activity in the United States slowed down in December because of consistent supply chain problems. According to The Institute for Supply Management, activity in manufacturing fell to a reading of about 58.7 in December. November’s reading stood at about 61.1.
While any reading above 50 signals that there is growth in the manufacturing sector, analysts do like to watch any readings that begin to fall, as this could continue in the months to come if these problems are not fixed. Manufacturing activity hasn’t been this low since January of 2021. According to this data, manufacturing activity has slowed because of supply chain issues, as well as an overall decline in new orders and new productions.
Thus far, analysts do not believe that the Omicron variant, the highly contagious variant of the coronavirus, has affected manufacturing activity too much. The Omicron variant was first announced in November, and while cases have surged in the month since, other major factors seem to be to blame for this drop in activity. However, as cases continue to surge because of this variant, analysts are wary that this could begin to impact manufacturing activity as a whole.
For example, the United States recently revealed that they had recorded a record one million new cases of COVID-19 this week. Analysts that study the manufacturing sector believe that if infections begin to soar in this regard, then activity will almost surely be impacted in some way. As a result, this could infect the number of materials and goods that consumers are able to buy, as well as business activity as a whole.
In December, it appears that manufacturing activity has fallen because of the ongoing global supply chain problems. While the fears that many had in regards to the holiday shopping season never appeared to the great extent worried, the global supply chain is still causing major issues for many businesses in various industries.
It doesn’t appear as if these issues will be going away any time soon. While some major problems in the global supply chain will likely, finally, be worked out in 2022, analysts do worry that the ongoing, fluid pandemic will keep the supply chain from fully recovering. The highly contagious Omicron variant will likely negatively impact the supply chain, just as the other variants did.
As more workers are forced to stay home because of the variant, the supply chain could continue to suffer, and new problems could arise. If the variant goes away soon, much like the Delta variant eventually did, then this may not be a problem.
Analysts are continuing to keep an eye on the manufacturing activity in the United States, and on these global supply chain problems that continue to impact businesses in many industries. As the holiday shopping season winds to a close, spending will naturally decrease. This could also cause business and manufacturing activity to naturally decrease as consumers slow down in their spending. However, the global supply chain problems could slow down manufacturing activity even more in the new year.