ISM Manufacturing Index Contracts in November

This morning the Institute for Supply Management published its monthly Manufacturing Report for November. The latest headline Purchasing Managers Index (PMI) was 49.0, down 1.2 from the previous month and in contraction territory. Today's headline number was below the forecast of 49.8.

Here is an exerpt from the report:

Fiore continues, “The U.S. manufacturing sector dipped into contraction, with the Manufacturing PMI® at its lowest level since the coronavirus pandemic recovery began. With Business Survey Committee panelists reporting softening new order rates over the previous six months, the November composite index reading reflects companies’ preparing for future lower output. Demand eased, with the (1) New Orders Index remaining in contraction territory, (2) New Export Orders Index below 50 percent for a fourth consecutive month, (3) Customers’ Inventories Index effectively in ‘just right’ territory, climbing 7.1 percentage points, and (4) Backlog of Orders Index moving deeper into contraction. Output/Consumption (measured by the Production and Employment indexes) declined month over month, with a combined negative 2.4-percentage point impact on the Manufacturing PMI® calculation. The Employment Index moved back into contraction, and the Production Index decreased but still remained in modest growth territory. Panelists’ companies confirm that they are continuing to manage head counts through a combination of hiring freezes, employee attrition, and now layoffs. Inputs — defined as supplier deliveries, inventories, prices and imports — mostly accommodated future demand growth. The Supplier Deliveries Index indicated faster deliveries, and the Inventories Index expanded at a slower rate as panelists’ companies continued to manage the total supply chain inventory. The Prices Index decreased for the ninth consecutive month, falling deeper into contraction territory. See report