U.S. ISM Manufacturing Index Slips in November
by:Tom Moeller
|in:Economy in Brief
Summary
- Component declines are widespread.
- New orders fall to weakest level in over two years.
- Pricing power continues to diminish.
The ISM U.S. manufacturing index declined to 49.0 in November from 50.2 in October and 50.9 in September, according to the Institute for Supply Management. The reading was below the peak of 63.7 in March 2021 and stands at the lowest level since May 2020. The Action Economics Forecast Survey expected 49.8 for November
The new orders index fell to 47.2 from 49.2 in October, the fifth month in the last six below the break-even level of 50. It has deteriorated from a level of 61.4 last November and is off its high of 67.4 in December 2020. A lessened 12.7% (NSA) of respondents reported higher new orders in November while a steady 25.0% reported a decline. The production index eased to 51.5 this month from 52.3. It remained below the high of 66.4 in March 2021. The inventory index fell to 50.9 in November from 52.5, the lowest reading since July 2021. Offsetting these declines, the supplier delivery index edged higher to 47.2 but remained well below the May 2021 high of 78.8, thus indicating much faster product delivery speeds.
The employment index fell to 48.4 in November, its lowest point since June. A lessened 12.8% (NSA) of respondents reported higher employment last month while an increased 16.6% reported less hiring.
The prices index fell sharply to 43.0 (NSA) in November from 46.6 in October. It stands well below its high of 92.1 in June of last year. A lessened 13.1% (NSA) of respondents reported higher prices while 27.1% reported price declines.
In other ISM series, the new export orders index rose to 48.4 in November from 46.5 October. It remained down from its recent high of 57.1 in February. The imports index fell to 46.6 in November, the lowest point since May 2020 and down from an October 2020 high of 58.1. The order backlog index dropped to 40.0, the lowest level since May 2020.
The ISM figures are based on responses from over 400 manufacturing purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. 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.
