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According to the ISM (Institute for Supply Management) November Report on Business, economic activity in the US manufacturing sector contracted in November for the eighth consecutive month and the 24th time in the last 25 months. The Manufacturing PMI index registered 48.4 percent in November, 1.9 percentage points higher than the 46.5 percent recorded in October. The share of manufacturing sector GDP registering a composite PMI calculation at or below 45 percent (a barometer of overall manufacturing weakness) was 48 percent in November, a 2 percent increase compared with October.
Highlights include a slight increase in the New Orders Index, which rose 3.3 percentage points, compared with the October figure after seven months of contraction. The Supplier Deliveries index also improved by 3.3 percent relative to October, indicating faster deliveries. New Export Orders were also up by 3.2 percent, and the Backlog of Orders Index was down 0.5 percentage points month-over-month. The Prices Index was down 4.5 percentage points, although it remained in expansion (or ‘"increasing") territory.
The three manufacturing industries reporting growth in November are: Food, Beverage, & Tobacco Products; Computer & Electronic Products; and Electrical Equipment, Appliances, & Components. Of the eleven industries reporting contraction, Chemical Products and Transportation Equipment stand out as two of the largest manufacturing sectors with significant influence on other industries. The downward trend in automotive purchases driven by high interest rates and sustained higher prices continued to hamper the Transportation sector.
The ISM forecasts that economic recovery may still be two to three months away. Post-election clarity on policy direction is seen as driving increasing demand, while concerns about pending tariffs are seen as a detractor. Further details and associated indices are available here.
Learn more about the digital transformation outlook for industrial, energy, and infrastructure markets at arcweb.com.