The Institute for Supply Management (ISM) said that manufacturing activity expanded robustly in November, even as it pulled back for the second straight month from September’s reading, which was the fastest pace since May 2004.
The ISM Manufacturing Purchasing Managers’ Index (PMI) decreased from 58.7 in October to 58.2 in November. Even with some easing in the headline number, the underlying data remained promising, with respondents citing strong growth in demand and an optimistic outlook for next year.
Indeed, production (up from 61.0 to 63.9) accelerated at its fastest pace since March 2011. New orders (up from 63.4 to 64.0), employment (down from 59.8 to 59.7) and exports (down from 56.5 to 56.0) also signified hardy increases in November, even with some easing in the latter two indices.
The labor market for manufacturers continued to be tight, with the hiring index averaging 59.9 over the past four months, up from a more modest 52.5 one year ago. In addition, improvements in the global economy have been helpful for manufacturers, with exports expanding for 21 straight months.
Meanwhile, prices for raw materials (down from 68.5 to 65.5) remained elevated despite the input cost index decelerating from September’s rate, which was the highest in more than six years. While we have seen decelerating pricing pressures in general since the spring months, this more-recent pickup reflects a rebound in some commodity costs. In other news, inventories (down from 48.0 to 47.0) contracted for the second straight month, with stockpiles declining after modest gains in both August and September.