Growth in U.S. manufacturing activity saw a modest slowdown in the month of November, according to a report released by the Institute for Supply Management on Friday.
The ISM said its purchasing managers index dipped to 58.2 in November from 58.7 in October, although a positive reading still indicates growth in manufacturing activity. Economists had expected the index to edge down to 58.4.
Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, said faster growth in new orders and production was offset by supplier delivery improvement and declines in raw material inventory.
The report said the supplier deliveries index slumped to 56.5 in November from 61.4 in October, with a reading above 50 percent indicating slower deliveries.
"This is the 19th straight month of slowing supplier deliveries, and reflects delivery performance improvement over the prior month, but still insufficient to maintain raw material inventory levels," said Fiore.
The inventories index slid to 47.0 in November from 48.0 in October, indicating a contraction in raw materials inventories for the second consecutive month.
The ISM said the employment index also edged down to 59.7 in November from 59.8 in October, although Fiore said job growth in the manufacturing sector remains strong despite of signs of labor market tightening.
On the other hand, the report said the new orders index inched up to 64.0 in November from 63.4 in December, indicating growth in new orders for the fifteenth consecutive month.
The production index also climbed to 63.9 in November from 61.0 in October, reaching its highest level since hitting 64.2 in March of 2011.
"Production expansion continues at levels that kept pace with new orders, consumed raw material inventory and positively impacted customer inventory," said Fiore.
On the inflation front, the prices index fell to 65.5 in November from 68.5 in October, suggesting a slowdown in the pace of price growth.
Michael Pearce, U.S. economist at Capital Economics, said, "The depreciation in the dollar this year, together with the strength of demand in the rest of the world, means the outlook for the manufacturing sector remains bright."
The ISM is scheduled to release a separate report next Tuesday on activity in the service sector in the month of November.
by RTT Staff Writer
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