ISM: U.S. Manufacturing PMI Drops to 48.2 in Nov


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- A key U.S. purchasing managers index released on Monday 
(12/1) showed a reading that dropped from last month and remained below a core 
marker that separated expansion from contraction -- the ninth straight month 
for such a trend. 

   The Manufacturing Purchasing Managers Index of the Institute for Supply 
Management stood at 48.2 in November, down from 48.7 recorded in October. It 
was the second monthly drop in a row, and marked the ninth consecutive month 
that the reading was below the 50-point mark that separates the positive and 
negative constituencies for the index.

   This is not the first extended period of contraction in U.S. manufacturing 
PMI. Prior to a two-month expansion between January and February this year, the 
index saw 26 straight months of weakness.

   The latest decline in U.S. manufacturing activity was attributed, in part, 
to pullbacks in supplier deliveries, new orders and employment. While the 
Production Index rose in November, the New Orders and Employment indices each 
fell 2 percentage points month-on-month.

   "Decreases in two of the four demand indicators (Backlog of Orders and New 
Orders) overwhelmed the gains posted by the New Export Orders and Customers' 
Inventories indexes," said Susan Spence, chair of the ISM Manufacturing 
Business Survey Committee.

   Spence also noted that the Customers' Inventories Index had contracted at a 
slower rate. "A 'too low' status for the Customers' Inventories Index is 
usually considered positive for future production," she added.

   A breakdown of the data showed growth reported by four manufacturing 
industries in November. Petroleum and coal products were among eleven 
manufacturing industries surveyed that reported a contraction.

   In November, the production index rose 3.2 points to 51.4, up from 48.2 the 
prior month, while the backlog of orders index eased to 44.0, 3.9 points lower 
than reported in October.

   The contraction in new export orders slowed, with the associated index 
rising 1.7 points to 46.2 in November.

   The customers' inventories index remained in "too low" territory, rising 0.8 
points to 44.7, according to the report.

   The contraction in employment sped up, with the index dropping 2 percentage 
points to 44.

   November's prices index increased at a faster rate, registering 58.5 points, 
up 0.5 points from last month's reading of 58.

   Contraction in the imports index slowed down, improving 1.7 points to 46.2 
in November.

   Following the release of the data, crude oil futures continued to climb, 
with the front-month NYMEX West Texas Intermediate futures contract rising 
$1.06 to $59.62 bbl. The U.S. dollar index remained little changed near 99.155 
points against a basket of foreign currencies, down 0.258 points on the day.




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