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ISM: Manufacturing contracts for first time in three years

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ISM:  Manufacturing contracts for first time in three years

November PMI comes in at 48.6%.

According to a closely-watched index of manufacturing activity, manufacturing in the United States continued to slow in November, actually moving into contraction territory. 

The Institute for Supply Management reported yesterday that its manufacturing PMI for October registered at 48.6%, a decrease of 1.5 percentage points from October.  This is the first time the PMI has gone into contraction territory in 36 months. (A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.)

Analysts had expected a reading of 50.5%.

Bradley J. Holcomb, chair of the ISM’s Manufacturing Business Survey Committee, stated, “Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November."

The ISM's New Orders Index also fell into negative territory, coming in at 48.9% in November, a decrease of 4.0 percentage points when compared to October. The Production Index declined as well, coming in at 49.2%, a 3.7% decline from October.

 

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