The Institute for Supply Management (ISM) has reported that November was yet another gain for its reading on manufacturing. The index rose to 57.3% in the November Manufacturing ISM Report on Business, versus 56.4% the prior month and a consensus estimate of 55.5% from Bloomberg.
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The long and short of the matter is that the report was higher when it was expected to drop. What readers should likely focus on in this ISM report is that new orders, production and employment, and inventories are growing, while supplier deliveries are slowing.
Perhaps the biggest consideration here is that this marked the sixth consecutive month of economic activity expanding in the manufacturing sector. Overall, the economy grew for the 54th consecutive month, based on data from supply executives.
The PMI has also increased progressively each month since June, with November’s reading reflecting the highest PMI in 2013. Individual components were as follows: the New Orders Index increased in November by three percentage points to 63.6%, and the Production Index increased by two percentage points to 62.8%.
The Employment Index registered 56.5%, an increase of 3.3 percentage points, compared to October’s reading of 53.2%. If you view the full report, this was shown to reflect the highest reading since April 2012 when the Employment Index registered 56.8%.
We also saw that 15 of 18 manufacturing industries reported growth in November relative to October. The 15 growth sectors were as follows:
- Plastics & Rubber Products
- Textile Mills
- Furniture & Related Products
- Primary Metals
- Food, Beverage & Tobacco Products
- Paper Products
- Printing & Related Support Activities
- Petroleum & Coal Products
- Miscellaneous Manufacturing
- Electrical Equipment, Appliances & Components
- Transportation Equipment
- Chemical Products
- Computer & Electronic Products
- Nonmetallic Mineral Products
- Fabricated Metal Products
The three industries that reported contraction in November were Apparel, Leather & Allied Products; Wood Products; and Machinery.
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