ISM: Purchasing Index Lowest Since July 2009
Economic activity in the manufacturing sector contracted in November following two months of modest expansion, while the overall economy grew for the 42nd consecutive month, according to the latest Manufacturing ISM Report On Business.
The Purchasing Managers Index (PMI) registered 49.5%, a decrease of 2.2 percentage points from October’s reading of 51.7%, indicating contraction in manufacturing for the fourth time in the last six months. This month’s PMI reading reflects the lowest level since July 2009 when the PMI registered 49.2%, said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.
The 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. The Production Index registered 53.7%, an increase of 1.3 percentage points, indicating growth in production for the second consecutive month. The 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%. The Prices Index registered 52.5%, reflecting a decrease of 2.5 percentage points.
Comments from the panel this month generally indicate that the second half of the year continues to show a slowdown in demand. Respondents also express concern over how and when the fiscal cliff issue will be resolved.
Of the 18 manufacturing industries, six are reporting growth in November in the following order: Petroleum & Coal Products; Paper Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Computer & Electronic Products.
The 11 industries reporting contraction in November