Manufacturing’s economic expansion eased in November, the Institute for Supply Management said today.
The Tempe, Ariz.-based group’s manufacturing index, known as the PMI, registered at 57.5 percent last month, according to a monthly report. That was down from a strong 59.3 percent in October.
Two key components of the PMI, new orders and production, also eased in November, ISM said. Employment slipped into negative territory, according to the institute.
However, ISM said employment was the result of manufacturers having trouble finding workers rather than job cuts.
“It’s not a lack of work, it’s a lack of people,” Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, said on a conference call.
The group said 16 of 18 industries reported economic expansion, including apparel, fabricated metal products, primary metals, machinery, miscellaneous manufacturing and transportation equipment.
The PMI is considered a leading economic indicator and a barometer of where manufacturing is heading. A PMI above 50 percent indicates economic expansion while below 50 percent indicates economic contraction. The index is based on a survey of 350 manufacturing supply executives.
The index has shown expansion for six straight months. The PMI has averaged 51.5 percent for the past 12 months. The index reached a low of 41.5 percent in April, the result of factory shutdowns implemented to slow the spread of the novel coronavirus (COVID-19).
Fiore said COVID-19 remains a worry. “There is concern about future demand,” he said. “That has to do with virus fatigue.”
COVID-19 has spread throughout the United States this fall as colder weather has caused people to spend more time indoors. Residents of some regions have resisted wearing masks and other steps recommended by heath experts to hold back the virus.
There are various promising vaccines for COVID-19 but they won’t be available widely until next year.
ISM’s New Orders Index fell to 65.1 percent last month from 67.9 percent in October. Fifteen of 18 industries reported an increase in orders.
The institute’s Production Index declined to 60.8 percent in November from 63 percent the month before. Fourteen of 18 industries reported a gain in output.
The group’s Employment Index was 48.4 percent in November, down from 53.2 percent in October. ISM said eight industries reported job gains, while seven said they had decreases in employment.