Data from the US released today, showed that the ISM manufacturing index rose to 59.3 in November. According to analysts at Well Fargo, the index gained amid stronger growth in new orders, backlogs and employment. They point out that prices rose at a significantly slower rate as oil prices tumbled, but the supply chain remains tight.
Key Quotes:
“Manufacturing activity remained robust in November according to the latest ISM report. After hitting a six-month low in October, the ISM manufacturing index rebounded 1.6 points. At 59.3, the index continues be near some of the highest levels of the current expansion.”
“With generally strong orders levels and rising backlogs, manufacturers continue to add workers. The employment index rose to 58.4 last month. We expect the manufacturing sector will see another meaningful gain in the nonfarm payrolls report on Friday.”
“One area to see a sharp pullback in November was prices. The price paid component fell 10.9 points to 0 60.7 as oil prices tumbled about 30% over the course of the month. Nevertheless, comments from the survey continued to indicate that some producers are grappling with higher costs related to tariffs.”
“Uncertainty surrounding capital spending plans and global growth is likely to linger in the coming months, while the dollar’s strength remains an impediment to exports. Perhaps most importantly, slowing domestic demand will likely weigh on production growth, making it difficult for the ISM index to maintain readings close to 60 over the coming year.”
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