U.S. ISM Manufacturing Index Increases in November
by:Tom Moeller
|in:Economy in Brief
Summary
- Surprising strength moves index to highest level since June.
- New orders, employment & inventories lead improvement.
- Prices index backpedals.
The ISM Purchasing Managers Index of activity in the manufacturing sector rose to 48.4 during November from 46.5 in October and 47.2 in September. It was the highest level since June, though still below the break-even level of 50.3 reached in March. A level of 47.5 for November had been expected by the Action Economics Forecast Survey.
Performance of the component indexes was mixed last month. The new orders measure rose to 50.4 from 47.1. It was the highest level since March. Twenty-one percent (NSA) of survey respondents reported higher new orders while 24.7% reported declines. The employment index increased to 48.1 from 44.4. It stood at a five-month high as 14.2% indicated job gains and 20.5% reported declines. The inventories reading improved to 48.1 from 42.6 in October. Sixteen percent of respondents raised inventory levels while 21.3% lowered them. The production index edged up to 46.8 after declining to 46.2 in October. It remained below the high of 54.6 in March. Sixteen percent of respondents reported higher production while 20.9% reported declines. Working lower, the supplier delivery index weakened to 48.7 last month from 52.0 during October. Six percent of respondents reported slower delivery speeds and 8.3% reported a speed-up.
The prices index, which is not part of the composite series, fell to 50.3 (NSA) from 54.8 in October. A lessened 12.2% of respondents reported higher prices last month while an increased 11.7% reported lower prices.
In other series, the export order index rose to 48.7 in November from 45.5 in October, but remained down from a March high of 51.6. The imports index fell to 47.6 last month from 48.3, below a March high of 53.0, while the order backlog index declined to 41.8, a four-month low.
The ISM figures are based on responses from over 400 purchasing executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These indexes are diffusion indexes where a reading above 50 indicates expansion and a reading below 50 points to contraction. The figures from the Institute for Supply Management can be found in Haver’s USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver’s AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
Global