Manufacturing Getty

US Manufacturing Stays Strong in November

Output spiked and employment remains strong according to the Institute for Supply Management.

The manufacturing sector continued to grow at an above-average rate in November, as the impact of back-to-back hurricanes over the summer recedes, according to an industry survey released on Dec. 1.

Output spiked and employment remains strong to produce "a really strong report" on the sector, the Institute for Supply Management (ISM) said.

The ISM's purchasing managers index slowed to 58.2% from 58.7% in October, but remained well above the average for the past year, with 14 of the 18 industries surveyed reporting growth.

However, the decline actually reflects an improvement in conditions following the hurricanes, as transportation issues from storms are being overcome, Timothy Fiore, chair of ISM's Manufacturing Business Survey Committee, explained.

The supplier deliveries index fell nearly five points to 56.5%, which indicates shipments are speeding up.

Manufacturers expected to see three months of transportation difficulties in the wake of the hurricanes -- especially Hurricane Harvey's hit to the key chemical and oil production facilities in Houston -- as well as six months of impacts on prices, Fiore said.

He noted that only 5% of comments from the manufacturers surveyed mentioned the hurricanes, down sharply from the prior two months.

The report showed a three-point jump in the production index to 63.9%, and a more than half-point rise in new orders to 64%, while employment slipped a tenth to a still-strong 59.7%.

The only industries reporting contraction were wood and petroleum and coal.

Fiore said industries reported that "price pressures continue," with 16 of the 18 sectors surveyed reporting increases. The price index slipped three points to 65.5%.

The comments from the companies surveyed indicate a strong surge into 2018, with many noting they are not seeing the usual year-end slowdown in orders.

"We are just coming off a record sales year. We expect to continue in 2018 robust activity," one manufacturing firm said.

Meanwhile, a metal producer noted, "We are seeing steady, consistent demand for end of year. We usually see a slowdown, which we haven’t seen yet."

Copyright Agence France-Presse, 2017

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