The Current Business Conditions Index for the month came in at 63.9, down from the 2013 peak in November at 69.5, but still "above the lofty 60.0 mark," the institute said.
The index dropped to a 2013 low of 47 in June, but has topped 60 in four of the past six months.
The ISM said the Six-Month Outlook Index in December rose to 73.2. The expected revenue index came in at 63.2.
The employment index, at 55.1, indicated job growth. Both the prices paid and current revenues indexes came in at 60 in the month.