NEW YORK - The overall economy grew for the nineteenth straight time, while the manufacturing sector expanded for the sixteenth time, the Institute for Supply Management reported this morning.
According to the ISM’s monthly report on business, the ISM index dipped to 56.6 in November from 56.9 in October.
Economists polled by Thomson Reuters predicted the index would slip to 56.2.
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 manufacturing sector grew during November, with both new orders and production continuing to expand," said Norbert J. Ore, chair of the Institute of Supply Management's manufacturing business survey committee. “With the PMI at 56.6 percent, November’s rate of growth is the second fastest in the last six months. Exports and imports continue to support expansion in the sector. Prices moderated slightly during the month, but comments from the respondents express concerns with regard to pricing pressures. The list of commodities in short supply increased, though short supply items are not yet posing significant problems. Manufacturing continues to benefit from the recovery in autos, but those industries reliant upon housing continue to struggle.”
The closely watched prices paid index slid to 69.5 from 71.0. The employment index was at 57.5, off from 57.7 the prior month.
The production index decreased to 55.0 from 62.7, the new orders index fell to 56.6 from 58.9; the supplier deliveries index gained to 57.2 from 51.2; the export orders index decreased to 57.0 from 60.5; and the imports index rose to 53.0 from 51.5.
The inventories index increased to 56.7 from 53.9; the customers’ inventories index grew to 45.5 from 44.0; and backlog of orders held at 46.0.
Respondents’ comments included:
Business continues to improve; however, rising material prices are eroding margin. Increases to the consumer are inevitable in early Q1 2011.” (Paper Products)
“International markets expanding rapidly. Domestic market is slowly rebounding.” (Transportation Equipment)
“We’re starting to see capacity at suppliers become an issue.” (Machinery)
“Capital projects are being released, which is improving our sales.” (Computer & Electronic Products)
“We are seeing increases in chemical prices that seem to be driven by supply/demand imbalance.” (Chemical Products)
