The manufacturing sector continued to expand in November, the 28th consecutive month of expansion, according to the latest Manufacturing ISM Report on Business. According to the Institute for Supply Management, the Purchasing Managers Index was 52.7 percent, 1.9 percentage points higher than October’s reading.
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The Production Index grew 6.5 percentage points to 56.6 percent, and the New Orders Index increased 4.3 percentage points to 56.7 percent.
\”While the Prices Index, at 45 percent, increased 4 percentage points from the October reading of 41 percent, prices of raw materials continued to decrease (registering below 50 percent) for the second consecutive month,\” said Bradley J. Holcomb, chairman of the ISM Manufacturing Business Survey committee and author of the report. \”Respondents cite continuing concerns about the general economic environment, government regulations and European financial conditions, but are cautiously more optimistic about the next few months based on lower raw materials pricing and favorable levels of new orders.\”
Of the 18 manufacturing industries, eight are reporting growth in November, in the following order: Wood Products; Textile Mills; Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Computer & Electronic Products; Apparel, Leather & Allied Products; and Paper Products. The nine industries reporting contraction in November – listed in order – are: Miscellaneous Manufacturing; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Chemical Products; Fabricated Metal Products; Transportation Equipment; and Machinery.
\”A very strong improvement in new orders and production paints a rosy picture for near-term manufacturing activity,\” said Daniel J. Meckstroth, chief economist for MAPI. \”In addition, strong gains in motor vehicle production, capital equipment production, and oil field goods continue to drive moderate industrial growth.
\”The fact that manufacturing is growing faster than the general economy, though, is unsurprising since the industrial sector is still catching up,\” he added. \”Manufacturing production has recovered only a bit over one-half of its loss from the 2008-2009 recession, in contrast to full recovery in GDP for the economy at large in the third quarter of 2011.\”
