“The November Manufacturing PMI® registered 61.1%, an increase of 0.3 percentage point from the October reading of 60.8%. This figure indicates expansion in the overall economy for the 18th month in a row after a contraction in April 2020.
The New Orders Index registered 61.5%, up 1.7 percentage points compared to the October reading of 59.8%.
The Production Index registered 61.5%, an increase of 2.2 percentage points compared to the October reading of 59.3%. The Prices Index registered 82.4%, down 3.3 percentage points compared to the October figure of 85.7%.
The Backlog of Orders Index registered 61.9%, 1.7 percentage points lower than the October reading of 63.6%.
The Employment Index registered 53.3%, 1.3 percentage points higher compared to the October reading of 52%. The Supplier Deliveries Index registered 72.2%, down 3.4 percentage points from the October figure of 75.6%.
The Inventories Index registered 56.8%, 0.2 percentage point lower than the October reading of 57%.
The New Export Orders Index registered 54%, a decrease of 0.6 percentage point compared to the October reading of 54.6%. The Imports Index registered 52.6%, a 3.5-percentage point increase from the October reading of 49.1%.”
Fiore continues, “The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with some indications of slight labor and supplier delivery improvement. All segments of the manufacturing economy are impacted by record-long raw materials and capital equipment lead times, continued shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products. Coronavirus pandemic-related global issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential. However, panel sentiment remains strongly optimistic, with 10 positive growth comments for every cautious comment. Panelists remain focused on the importance of improving supply chain issues to respond to ongoing high levels of demand.
Demand expanded, with the (1) New Orders Index growing, supported by continued expansion of the New Export Orders Index, (2) Customers’ Inventories Index remaining at a very low level and (3) Backlog of Orders Index staying at a very high level.
Consumption (measured by the Production and Employment indexes) grew during the period, with a combined 3.5-percentage point increase to the Manufacturing PMI® calculation. The Employment Index expanded for a third month, with some indications that the ability to hire is improving, partially offset by the challenges of turnover and backfilling.
Inputs — expressed as supplier deliveries, inventories, and imports — continued to constrain production expansion, but there are early signs of supplier performance improving. The Supplier Deliveries Index slowed again but at a slower rate, while the Inventories Index expanded more slowly. In November, the Prices Index expanded for the 18th consecutive month, at a slower rate, indicating continued supplier pricing power and scarcity of supply chain goods.
“All of the six biggest manufacturing industries — Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Petroleum & Coal Products; Fabricated Metal Products; and Transportation Equipment, in that order — registered moderate to strong growth in November.
“Manufacturing performed well for the 18th straight month, with demand and consumption registering month-over-month growth, in spite of continuing obstacles. Meeting demand remains a challenge, due to hiring difficulties and a clear cycle of labor turnover at all tiers. Panelists’ comments suggest month-over-month improvement on hiring, offset by backfilling required to address employee turnover. Indications that supplier delivery rates are improving were supported by the Supplier Deliveries Index softening. Transportation networks, a harbinger of future supplier delivery performance, are still performing erratically,” says Fiore.
The 13 manufacturing industries reporting growth in November — in the following order — are: Apparel, Leather & Allied Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Machinery; Plastics & Rubber Products; Paper Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Chemical Products; Petroleum & Coal Products; Fabricated Metal Products; and Transportation Equipment. The two industries reporting a decrease in November compared to October are: Printing & Related Support Activities; and Primary Metals.
Manufacturing at a Glance
|Index||Series Index Nov||Series Index Oct||Percentage Point Change||Direction||Rate of Change||Trend* (Months)|
|Customers’ Inventories||25.1||31.7||-6.6||Too Low||Faster||62|
|Backlog of Orders||61.9||63.6||-1.7||Growing||Slower||17|
|New Export Orders||54.0||54.6||-0.6||Growing||Slower||17|