American manufacturing activity leaped higher in November.
The Institue for Supply Management’s manufacturing index rose to 59.3 in November, up from 57.7 in October. Economists had forecast a decline to 57.2, according to Bloomberg. In fact, the November number was so good it beat out the upper range of estimates of economists surveyed by Bloomberg.
“Comments from the panel reflect continued expanding business strength. Demand remains strong,” said Timothy R. Fiore, Chair of the Institute for Supply Management Manufacturing Business Survey Committee.
New orders rose 4.7 points to 62.1. Backlogs built as well, rising 8 tenths to 56.4. Both are signs that manufacturing is re-accelerating after a slight slowdown in growth earlier this autumn.
Manufacturing employment rose 1.6 points to 58.4.
The ISM manufacturing index is based on surveys of purchasing managers at more than 300 firms across the country. Readings above 50 indicate expansion in manufacturing. Over time, readings above 42 indicate the overall economy is expanding. This marked the 27th consecutive month in which the index came in above 50.
Export orders, a weak spot in recent months, held steady at 52.2. This ongoing softness is likely due more to weakening demand around the world as economies outside the U.S. stumble rather than reflecting trade war pressures.
Price pressure continues, the ISM noted, but at a lower level than earlier. Many of the comments received by ISM still highlight complaints about the metals tariff but according to ISM, “The Business Survey Committee noted that price increases are continuing to soften and/or decline in metals (all steels, copper and aluminum).” This suggests that any squeeze created by U.S. tariffs may already be declining.