November 2023 Manufacturing ISM Report On Business Reports Backlog of Orders Now Contracting at a Faster Rate

Author photo: Steve Clouther
BySteve Clouther
Industry Trends

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected. Economic activity in the manufacturing sector Manufacturing ISM Reportcontracted in November for the 13th consecutive month following a 28-month period of growth, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector contracted in November, as the Manufacturing PMI registered 46.7 percent, the same figure recorded in October. This is the 13th month of contraction.

ISM’s New Orders Index contracted for the 15th consecutive month in November, registering 48.3 percent, an increase of 2.8 percentage points compared to October’s reading of 45.5 percent.

The Production Index dropped into contraction territory in November, registering 48.5 percent, 1.9 percentage points lower than the October reading of 50.4 percent. This follows two months of expansion preceded by one month of “unchanged” status and two months of contraction.

ISM’s Employment Index registered 45.8 percent in November, 1 percentage point lower than the October reading of 46.8 percent. The index indicated employment contracted again in November after one month of expansion and three months of contraction before that.

Delivery performance of suppliers to manufacturing organizations was faster for the 14th straight month in November, as the Supplier Deliveries Index registered 46.2 percent, 1.5 percentage points lower than the 47.7 percent reported in October.

The Inventories Index registered 44.8 percent in November, 1.5 percentage points higher than the 43.3 percent reported in October. Manufacturing inventories contracted at a slower rate compared to the previous month.

ISM’s Backlog of Orders Index registered 39.3 percent, a 2.9-percentage point decrease compared to October’s reading of 42.2 percent, indicating order backlogs contracted for the 14th consecutive month (and at a faster rate in November) after a 27-month period of expansion.

The three manufacturing industries that reported growth in November are: Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; and Transportation Equipment. The 14 industries reporting contraction in November — in the following order — are: Paper Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Apparel, Leather & Allied Products; Textile Mills; Machinery; Primary Metals; Furniture & Related Products; Miscellaneous Manufacturing; Chemical Products; Fabricated Metal Products; Wood Products; and Plastics & Rubber Products.

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