The manufacturing economy remained in contraction in November, registering a PMI of 46.7 percent, unchanged from October, the Institute for Supply Management (ISM) reports today. That makes for 13 consecutive months of contraction following a 28-month period of growth.
“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,” says Timothy Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.
Of the six biggest manufacturing industries, two—Food, Beverage & Tobacco Products, and Transportation Equipment—registered growth in November, ISM says. The Nonmetallic Mineral Products industry also experienced growth.
New Orders were up 2.8 points from October but remained in contraction at 48.3 percent. Of the six largest manufacturing sectors, only Food, Beverage & Tobacco Products reported an increase in new orders. New order levels contracted at a slower rate compared to October because of continued sluggishness in Computer & Electronic Products, Machinery, and Fabricated Metal Products, says ISM.
The group’s Production Index dropped into contraction following two months of expansion, down 1.9 points from October’s 50.4 percent to 48.5 percent in November. Five industries report growth in production during the month of November, with six others reporting a decrease and seven more reporting no change in the period.
The Employment Index is down to 45.8 percent, indicating a slowdown in hiring and an increase in staff-reduction activity in November. Attrition, freezes and layoffs to reduce head counts increased during the period, with layoffs and attrition the primary measures, ISM reports. Three manufacturing industries report employment growth in November, while nine others report a decline in employment and six more saw no change.
More about the ISM Report On Business: The index is based on a survey of executives in 18 industries. The PMI is considered a leading economic indicator and a barometer of where manufacturing is headed. An index reading above 50% indicates economic expansion, while below 50% shows contraction.
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