November ISM Manufacturing: Contraction (48.6 Percent), Down From 50.1 Pct. in Oct.; Only 5 of 18 Industries Show Growth
Given how many regional manufacturing surveys have been in contraction for some time, consider today’s news a very tardy bow to the inevitable.
From the Institute for Supply Management (bolds and most paragraph breaks added by me):
Economic activity in the manufacturing sector contracted in November for the first time in 36 months, since November 2012, while the overall economy grew for the 78th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
… The November PMI® registered 48.6 percent, a decrease of 1.5 percentage points from the October reading of 50.1 percent.
The New Orders Index registered 48.9 percent, a decrease of 4 percentage points from the reading of 52.9 percent in October. The Production Index registered 49.2 percent, 3.7 percentage points below the October reading of 52.9 percent.
The Employment Index registered 51.3 percent, 3.7 percentage points above the October reading of 47.6 percent. The Prices Index registered 35.5 percent, a decrease of 3.5 percentage points from the October reading of 39 percent, indicating lower raw materials prices for the 13th consecutive month.
The New Export Orders Index registered 47.5 percent, unchanged from October, and the Imports Index registered 49 percent, up 2 percentage points from the October reading of 47 percent.
Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November.
Of the 18 manufacturing industries, five are reporting growth in November in the following order: Printing & Related Support Activities; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Transportation Equipment. The 10 industries reporting contraction in November — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Machinery; Primary Metals; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Furniture & Related Products; Fabricated Metal Products; and Chemical Products.
All three key GDP drivers — New Orders (48.9), Production (49.2), and Backlog of Orders (43.0) — are in contraction, and averaging a dismal 46.0.
Don’t know how this could have been the case, but expectations were for a still barely positive reading of 50.4 – 50.7.
Considering the negativity in various regional readings, today’s national number still seems high.