The overall economy grew for the seventy-eighth straight time, while the manufacturing sector contracted for the first time in three years, the Institute for Supply Management reported Tuesday.
According to the ISM's monthly report on business, the ISM index decreased to 48.6 in November from 50.1 in October.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
The prices paid index slid to 35.5 from 39.0. The employment index rose to 51.3 from 47.6.
The production index slipped to 49.2 from 52.9, the new orders index fell to 48.9 from 52.9; the supplier deliveries index inched up to 50.6 from 50.4; the export orders index remained at 47.5; and the imports index grew to 49.0 from 47.0.
The inventories index slid to 43.0 from 46.5; the customers' inventories index dropped to 50.5 from 51.0; and backlog of orders gained to 43.0 from 42.5.
Respondents' comments included:
- "The oil and gas industry is realizing that [the] 'low' oil prices are now the new reality with expectations to continue at this level for some time." (Petroleum & Coal Products)
- "Still seeing deflation in raw materials." (Chemical Products)
- "Bookings and new orders are lower than expected." (Computer & Electronic Products)
- "Automotive remains strong." (Fabricated Metal Products)
- "Business is still good." (Transportation Equipment)
- "Downturn in China and European markets are negatively affecting our business." (Machinery)
- "Strong dollar is slowing our sales to China as they can buy in Europe." (Primary Metals)
- "Medical device continues to be strong." (Miscellaneous Manufacturing)
- "Incoming orders have leveled off from the summer." (Furniture & Related Products)
- "Month-over-month conditions are stable." (Food, Beverage & Tobacco Products)
