Although the manufacturing sector of the U.S. economy grew for the 30th consecutive month in November, the pace was just a bit slower than in October, according to data released Dec. 1 by the Institute for Supply Management (ISM) in Tempe, Ariz. The group's PMI index of manufacturing activity as at 58.1% last month, a percentage point down from 59.1% in October. An index figure above 50% indicates U.S. manufacturing generally is growing; a figure below 50% signals contraction.
New orders for manufactured goods continued to grow in November but more slowly than in October, with that component of the PMI slipping nearly two percentage points to 59.8% in November from 61.7% the previous month. The pace of production also grew more slowly, slipping to 60.6% in November from 62% in October. Prices that manufacturers pay for supplies continued to increase in November, but not nearly as fast as in October. That part of the PMI was down to 74% in November from 84% in October. Fifty-three percent of the supply executives ISM surveyed reported paying higher prices, 5% reported lower prices and 42% said prices were unchanged.
"While energy costs and supply interruptions remain a concern, purchasers are satisfied in general with current business conditions," said Norbert J. Ore, chair of ISM's manufacturing business survey committee.
"After voluntarily culling inventories in the summer and involuntarily shipping out inventories this fall because the hurricanes disrupted production, factories are scrambling to catch up with orders and to rebuild inventories," observes Daniel J. Meckstroth, chief economist at Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group.