November 2019 Manufacturing ISM Report On Business Reports Manufacturing’s Contraction Continuing At a Faster Rate

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector contracted in November, and the overall economy grew for the 127th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing contracted in November, as the PMI registered 48.1 percent, a decrease of 0.2 percentage point from the October reading of 48.3 percent.  The PMI contracted for the fourth straight month, at faster levels compared to October.  This marks eight straight months of softening or contraction in manufacturing.

ISM’s New Orders Index registered 47.2 percent in November, a decrease of 1.9 percentage points when compared to the 49.1 percent reported for October.  This indicates that new orders contracted for the fourth straight month, and at a faster rate.

ISM’s Production Index registered 49.1 percent in November, which is 2.9 percentage points higher when compared to the 46.2 percent reported for October, indicating the fourth consecutive month of contraction.

ISM’s Employment Index registered 46.6 percent in November, a decrease of 1.1 percentage points when compared to the October reading of 47.7 percent. This indicates contraction in November for the fourth consecutive month, and at a faster rate.

The delivery performance of suppliers to manufacturing organizations was slower in November, as the Supplier Deliveries Index registered 52 percent.  This is 2.5 percentage points higher than the 49.5 percent reported for October.

The Inventories Index registered 45.5 percent in November, a decrease of 3.4 percentage points from the 48.9 percent reported for October.  The index contracted for the sixth straight month, and at a faster rate reflecting improvement in production output and a continuing effort to match raw-material inputs with new-order receipts.

ISM’s Backlog of Orders Index registered 43 percent in November, which is 1.1 percentage point lower than the 44.1 percent reported in October, indicating order backlogs contracted for the seventh consecutive month, at a faster rate in November.

Of the 18 manufacturing industries, five reported growth in November: Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing; and Computer & Electronic Products.  The 13 industries reporting contraction in November — listed in order — are: Wood Products; Printing & Related Support Activities; Furniture & Related Products; Textile Mills; Fabricated Metal Products; Transportation Equipment; Primary Metals; Plastics & Rubber Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Machinery; Chemical Products; and Electrical Equipment, Appliances & Components.