Manufacturing sector feels squeeze in November: ISM

Written by Becca Moczygemba

Activity in the US manufacturing sector contracted once again in November.

The Institute for Supply Management’s (ISM) Manufacturing PMI registered 46.7% in November, unchanged from October. A reading above 50 indicates the manufacturing economy is growing, while a reading below 50 indicates contraction.

The sector has been in contraction territory for the past 13 months. The last time it was above 50 was in October 2022 when the reading was 50.2.

“Demand remains soft, and production execution is slightly down compared to October as panelists’ companies continue to manage outputs, material inputs and — more aggressively — labor costs. Suppliers continue to have capacity,” said chair of the ISM Manufacturing Business Survey Committee, Timothy Fiore.

November’s report showed falling new orders, production, prices, order backlog, employment, supplier deliveries, inventories, imports, and exports.

One manufacturer of transportation equipment commented that, “Supply chain issues continue in several areas, resulting from difficulties during the United Auto Workers (UAW) strike.”

“Still waiting for orders to come in, and we also need to work down inventory levels that increased during the strike period. This will most likely happen in December,” said a manufacturer of fabricated metal products.

A manufacturer of primary metals noted that there are still issues “hiring quality candidates for both hourly and salaried positions.” Additionally, the company said that current inventory levels are too high, but the order book remains strong.

Only three manufacturing sectors out of 17 reported growth in November – food, beverage & tobacco products; nonmetallic mineral products; and transportation equipment. Primary metals, fabricated metal products, machinery, appliances and components, and miscellaneous manufacturing industries were all down.

Becca Moczygemba

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