US Manufacturing drops in November

Economic activity in the manufacturing sector contracted in November for the first time since May 2020 after 29 consecutive months of growth, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®, issued by Institute for Supply Management (ISM®) Manufacturing Business Survey Committee.

"The November Manufacturing PMI® registered 49% 1.2 percentage points lower than the 50.2% recorded in October. Regarding the overall economy, this figure indicates expansion for the 30th month in a row after contraction in April and May 2020. The Manufacturing PMI® figure is the lowest since May 2020, when it registered 43.5%. The New Orders Index remained in contraction territory at 47.2%, two percentage points lower than in October. The Production Index reading of 51.5% is a 0.8-percentage point decrease. The Prices Index registered 43%, down 3.6 percentage points compared to the October figure of 46.6%; this is the index's lowest reading since May 2020 (40.8%). The Backlog of Orders Index registered 40%, down 5.3 percentage points. The Employment Index returned to contraction territory (48.4%, down 1.6 percentage points) after being unchanged in October at 50%. The Supplier Deliveries Index reading of 47.2% is 0.4 percentage point higher than the October figure of 46.8%. Except for last month, the Supplier Deliveries Index hasn't been at this level since February 2012 (47%). The New Export Orders Index reading of 48.4% is up 1.9 percentage points compared to October's figure. The Imports Index dropped to 46.6%, 4.2 percentage points below the October reading," said Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

Fiore continues, "The U.S. manufacturing sector dipped into contraction, with the Manufacturing PMI® at its lowest level since the coronavirus pandemic recovery began. With Business Survey Committee panellists reporting softening new order rates over the previous six months, the November composite index reading reflects companies' preparing for future lower output. Panellists’ companies confirm that they are continuing to manage head counts through a combination of hiring freezes, employee attrition, and now layoffs. The Prices Index decreased for the ninth consecutive month, falling deeper into contraction territory.

Six manufacturing industries reported growth in November: Apparel, Leather & Allied Products; Non-metallic Mineral Products; Primary Metals; Miscellaneous Manufacturing; Petroleum & Coal Products; and Transportation Equipment. The 12 industries reporting contraction in November are: Printing & Related Support Activities; Wood Products; Paper Products; Textile Mills; Fabricated Metal Products; Furniture & Related Products; Chemical Products; Plastics & Rubber Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Machinery; and Electrical Equipment, Appliances & Components.

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