Manufacturers ended the year on a positive note, with the sector showing signs of steady expansion.
Hiring and new orders picked up pace in December as the overall manufacturing index slipped slightly to 57 from 57.3 in November — the best showing in more than two years and a signal that manufacturing grew more strongly in the second half of the year, the Institute for Supply Management said Thursday.
"Manufacturers tend to be mostly upbeat about future activity, as evidenced by other indicators," Moutray said in a Thursday blog post.
"Moving forward, it will be important for policymakers to keep the momentum going by considering pro-growth measures that will allow the sector to flourish and build on the progress seen over the past few months."
Any reading above 50 indicates expansion.
New orders increased by 0.6 percentage points to 64.2 percent, which is its highest reading since April 2010.
The index for new orders has exceeded 60 for five straight months, indicating an extremely healthy pace for sales growth, Moutray wrote.
The hiring index was up to 56.9 percent, its highest level since June 2011.
The production index also reflects strong growth, although the pace slowed slightly in December, down from 62.8 to 62.2.
It averaged 61.7 from July to December, exceeding the 52.6 average experienced from January to June.
At the same time, inventory growth moved negative, down from 50.5 to 47, the first decline in stockpiles since August.