U.S. Manufacturing Continues Expansion in November
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Economic activity in the U.S. manufacturing sector expanded in November for the 28th consecutive month, and the overall economy grew for the 30th consecutive month, according to the latest Manufacturing ISM Report On Business. The report, based on data compiled from purchasing and supply executives nationwide, was issued this week by Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee, Tempe, Ariz., USA.
"The PMI registered 52.7%, an increase of 1.9 percentage points from October's 50.8%, indicating expansion in the manufacturing sector for the 28th consecutive month. A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting. A PMI in excess of 42.5%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 30th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 28th consecutive month.
The New Orders Index increased 4.3 percentage points from October to 56.7%, reflecting the second month of growth after three months of contraction. While the Prices Index, at 45%, increased 4 percentage points from the October's 41%, prices of raw materials continued to decrease (registering below 50%) for the second consecutive month. Respondents cite continuing concerns about the general economic environment, government regulations, and European financial conditions, but are cautiously more optimistic about the next few months based on lower raw materials pricing and favorable levels of new orders.
Of the 18 manufacturing industries, eight are reporting growth in November, in the following order: Wood Products; Textile Mills; Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Computer & Electronic Products; Apparel, Leather & Allied Products; and Paper Products. The nine industries reporting contraction in November (listed in order) are: Miscellaneous Manufacturing; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Chemical Products; Fabricated Metal Products; Transportation Equipment; and Machinery.
ISM's New Orders Index registered 56.7% in November, which is an increase of 4.3 percentage points compared with October's 52.4%, and represents a continuation of growth for the second consecutive month. A New Orders Index above 52.1%, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).
The five industries reporting growth in new orders in November are: Wood Products; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Chemical Products. The six industries reporting decreases in new orders in November (listed in order) are: Nonmetallic Mineral Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Paper Products; Machinery; and Plastics & Rubber Products. Seven industries reported no change in new orders in November compared with October.
ISM's Production Index registered 56.6% in November, which is an increase of 6.5 percentage points compared with October's 50.1%. This indicates growth for the third consecutive month after just one month of contraction. An index above 51%, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.
The seven industries reporting growth in production during the month of November (listed in order) are: Wood Products; Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Computer & Electronic Products; Paper Products; and Electrical Equipment, Appliances & Components. The six industries reporting a decrease in production in November (listed in order) are: Miscellaneous Manufacturing; Nonmetallic Mineral Products; Machinery; Transportation Equipment; Chemical Products; and Plastics & Rubber Products.
ISM's Employment Index registered 51.8% in November, which is 1.7 percentage points lower than the 53.5% reported in October. This is the 26th consecutive month the Employment Index has been above 50%. An Employment Index above 50.1%, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, eight reported growth in employment in November in the following order: Textile Mills; Wood Products; Paper Products; Primary Metals; Food, Beverage & Tobacco Products; Machinery; Fabricated Metal Products; and Computer & Electronic Products. The eight industries reporting a decrease in employment in November (listed in order) are: Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Plastics & Rubber Products; Petroleum & Coal Products; Chemical Products; Transportation Equipment; and Printing & Related Support Activities.
The full report is posted on ISM's web site.
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