Today’s data from the Institute for Supply Management is showing that the November Manufacturing Report on Business was an utter disappointment. The ISM figure came in at 49.5%, which is under the 50.0% growth-contraction breakeven barometer. This was the lowest number for all of 2012 and the worst since July 2009. This was down more than two points than the 51.7% expected by Bloomberg. It was also down more than two points from the prior reading in October.
As far as the breakdown goes, new orders and production were said to be growing while the readings on employment and inventories were shown to be contracting. The report also showed that supplier deliveries are slowing. All in all, this represents contraction in manufacturing for the fourth time in the past six months. In short, the ISM is running on a mild recessionary level and that does not include the impact of the coming fiscal cliff.
Here is the breakdown:
New Orders Index registered 50.3%, a decrease of 3.9 percentage points from October, indicating growth in new orders for the third consecutive month.
Production Index registered 53.7%, an increase of 1.3 percentage points, indicating growth in production for the second consecutive month.
Employment Index registered 48.4%, a decrease of 3.7 percentage points, which is the index’s lowest reading since September 2009 when the Employment Index registered 47.8%.
Prices Index registered 52.5%, reflecting a decrease of 2.5 percentage points.
JON C. OGG