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Manufacturing in US surges to highest levels since 2018, new report shows

Manufacturing in US surges to highest levels since 2018, new report shows
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Manufacturing activity jumped in December to its highest level in more than two years, extending economic gains in the sector during the second half of 2020, a new report shows.

The Institute for Supply Management's monthly manufacturing index, released on Tuesday, rose to 60.7 percent last month, the highest figure since August 2018 and 3.2 points up from November.

The index had dipped below 50, indicating a contraction, between March and May when the pandemic took hold, but has been growing since.

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“The manufacturing economy continued its recovery in December," said ISM Chair Timothy Fiore in a statement Tuesday.

"Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that are limiting manufacturing growth potential," he added.

The sub-index on employment, which showed declines in November, jumped back into expansion territory in December, at 51.5.

One aspect of the index economists are watching closely is the measure of prices for raw materials, which spiked 12.2 points to 77.6, its highest reading since May.

“Aluminum, copper, steel, petroleum-based products including plastics, transportation costs, electronic components, corrugate, temporary labor, wood and lumber products all continued to record price increases,” Fiore said.