The ISM Manufacturing PMI stayed flat for November at 46.7 while the unemployment metric saw a drop of 1 point to 45.8, the prices saw an increase of 4.8 points to 49.9 and new orders saw an increase of 2.8 points to 48.3. The drop in the employment metric can be largely attributed to the wider economic conditions while prices and new orders slowing at a lesser rate signal that times may be getting better for manufacturing.
Despite the drop in the headline rate, the tobacco, transportation equipment and non-metallic mineral products industries reported growth. Additionally, orders for long-lasting manufactured goods are up year-on-year and factory production remains robust.
With that said, 14 industries saw a contraction, including paper products and electrical equipment. Furthermore, the United Auto Workers strike dramatically impacted the automotive industry and hindered growth.
Going forth, it is likely that the contraction in Manufacturing will be sustained until interest rates come back down alongside the US coming out of its economic rut. Another key concern for manufacturing is the demand for manufactured goods which is heavily dependent on US consumer spending which is currently subdued.
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