In November, the Institute for Supply Managements PMI registered 50.8%, a decrease of 0.1 percentage point when compared to October's reading of 50.9%.
A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.
"Manufacturing continued to grow during November, a trend that is now in its 10th month. The rate of growth in the sector was down slightly compared to October. While other segments of the economy are struggling, manufacturing continues to grow due to continuing strength in new orders, and a recovery in production from last month. Prices, driven higher by energy prices, are once again the major concern," said Norbert J. Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
ISM's New Orders Index registered 52.6% in November, which is 0.1 percentage point higher than the 52.5% reported in October. The Production Index rebounded to 51.9% in November, an increase of 2.3 percentage points, following a slight downturn in October when the index registered 49.6%. Manufacturers' inventories contracted again in November as the Inventories Index registered 46.9%, 0.3 percentage point lower than October's reading of 47.2%. In November, the ISM Prices Index registered 67.5%, indicating manufacturers are paying higher prices on average when compared to October. The Employment Index registered 47.8% in November, which is a decrease of 4.2 percentage points when compared to October's reading of 52%.
Looking at ISM's report, the Manufacturers Alliance/MAPIs chief economist Daniel J. Mechstroth had a different take. "The November ISM index for manufacturing shows that the industrial sector continues to struggle. We predict manufacturing production activity will decline in the fourth quarter of this year and will fall further in the first half of 2008. The housing collapse and plummeting consumer confidence will drag down big ticket spending for motor vehicles and appliances. Furthermore, credit tightening, falling corporate profits and declining capacity utilization will keep business investment in equipment lackluster at best. It is true that export order growth remains robust and import pressure has subsided. The trade sector will certainly cushion the industrial downturn."