The November 2010 ISM Manufacturing Survey is out and PMI came in at 56.6%. October 2010 manufacturing ISM was 56.9%. This is a -0.3% decrease in the factory index. While this is the 16th month for expansion (anything above 50 is an expansion), this is another flat line on the manufacturing ISM. April and October 2010 showed national manufacturing acceleration.
This is what the Institute of Supply Management said about their ISM manufacturing survey report, more subdued than last month:
November's rate of growth is the second fastest in the last six months. Exports and imports continue to support expansion in the sector. Prices moderated slightly during the month, but comments from the respondents express concerns with regard to pricing pressures. The list of commodities in short supply increased, though short supply items are not yet posing significant problems. Manufacturing continues to benefit from the recovery in autos, but those industries reliant upon housing continue to struggle.
New orders dropped -2.3 to 56.6% for the Novemember index.
There was also a massive drop in production, -7.7 to 55.0%. That's not good, that's a major decline in manufacturing output.
Below is the ISM table data, for a quick view.
|MANUFACTURING AT A GLANCE NOVEMBER 2010|
|Customers' Inventories||45.5||44.0||+1.5||Too Low||Slower||20|
|Backlog of Orders||46.0||46.0||0.0||Contracting||Unchanged||3|
Hiring decreased 0.2 to 57.5%. I like how the ISM put this:
An Employment Index above 49.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
In other words, crappy jobs numbers, slow growth. Below is the ISM manufacturing employment graph so you can see the trend line.
Inventories, in the below St. Louis FRED graph, increased 2.8 percentage points to expansion, 56.7%. The ISM says inventories above 42.6% indicate expansion, as we've seen with GDP being a huge proportion of inventories.
Exports decreased and imports increased. Not good for the U.S. economy. Exports dropped 3.5 to 57%, while imports increased 1.5 percentage points to 53.0%. That is not going to help the trade deficit.
The ISM neutral point is 50. Above is growth, below is contraction, although the ISM is this report is noting some variance in the individual indexes (see their report). For example, A PMI above 42, over time, also indicates growth.
This report came out yesterday, but in spite of the hype from the Chicago regional ISM index, it's clear we have another economic muddling along sort of report.
Respondents mentioned increasing prices, even though the index dropped -1.5 percentage points. The ISM has much more data and tables, on their website.