- The flash estimate was 48.6
- Before it was 50.0
- New orders are in contraction
- Goods producers pointed out that, although marginal, the decline in new sales was linked to weak customer demand, economic uncertainty and continued declines in customer inventories.
- Input costs rose at a ‘noticeably’ slower pace
- Employment fell for the second consecutive month
Chris Williamson, chief business economist at S&P Global Market Intelligence, said:
“US manufacturers recorded another difficult month in November. Production barely increased while new work entries showed a further decline, suggesting that the goods-producing sector’s contribution to fourth-quarter GDP quarter is weak, or even non-existent.
“Orders have actually increased in only three of the past 18 months, reflecting a prolonged period of sluggish post-pandemic demand as consumers shifted spending toward services such as travel and leisure, and that business customers reduced their excess inventory which had been reduced. accumulated during pandemic-related supply issues.
“It is encouraging to see some signs that the inventory cycle is starting to reverse, with producers of intermediate goods (inputs supplied to other businesses) now reporting modest growth in their order books.
“U.S. producers, however, continue to focus on reducing costs by reducing headcount, and have now taken a cut in payrolls for two consecutive months. Except for the early months of the pandemic, the survey did not find such a consecutive monthly decline in factory employment since 2009.
“Lower employment could translate into lower consumer spending, but it would also reduce wage bargaining power.
“Lower wage pressures, combined with a marked slowdown in raw material input cost inflation, have already resulted in a decline in average factory selling price inflation of goods to a rate below the average observed in the decade before the pandemic, the rate of increase decreased further in November to help reduce consumer price inflation even further in the months to come.
The ISM survey on the manufacturing sector is expected at the start of the hour. The Euro and Sterling are near the day’s lows on the heels of this report, although these flows are not a result of this report.
This article was written by Adam Button at www.forexlive.com.