- Previously it was 49.7
- The mid-month reading was 48.3
- Production falls to an 18-month low
- The decline in new orders is accelerating after almost stabilizing in November
- Export orders fall more than domestic orders, weakness in Europe and Australia
- Employment continues to grow modestly for the second month
- Input cost inflation jumps to highest level since August
Chris Williamson, chief business economist at S&P Global Market Intelligence
“Sentiment among US manufacturers brightened in November, although any feel-good factor has yet to come from higher factory output. “Optimism about the year ahead has risen to a level not surpassed in two and a half years, boosted by the removal of uncertainty ahead of the election, as well as the prospect of stronger economic growth and greater protectionism against foreign competition under the new Trump administration in 2025.
“In contrast, current production levels fell for the fourth month in a row in November, falling at a rate not exceeded in nearly a year and a half. The gap between expected future output and actual current output is now the widest seen in a decade if the pandemic is excluded, highlighting the stark divergence between dire current conditions and growing expectations of better times ahead.
“Demand conditions must improve alongside improving confidence to encourage producers to increase output. However, while export sales continue to fall sharply, we note that the fall in total new orders in November was the smallest in five months, suggesting that the decline in domestic demand for goods is easing and could help revive the manufacturing sector heading into 2025.
“The promise of protectionism, meanwhile, has led to an increase in input purchases by some American manufacturers, as they seek to advance the increase in import prices due to threatened tariffs. One in four companies that reported higher input purchases in November attributed the increase to tariff threats, underpinning US manufacturers’ concerns about the inflationary impact of tariffs.”
There is real optimism about the change in administration, but that will have to translate into orders in the coming months or there will be a quick turnaround here.
This article was written by Adam Button at www.forexlive.com.
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