But he cautioned the contraction could be a blip, noting that the index is tracing a similar trajectory this year to that of 2012, which fell into contractionary territory in November and then regained its footing.
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Barclays November global manufacturing confidence final reading dropped to -0.61, reversing the previous month’s improvement.
Hungaryʼs seasonally-adjusted Purchasing Managers Index (PMI) rose to 56.2 points in November from 55.3 in October, the Hungarian Association of Logistics, Purchasing and Inventory Management (Halpim), which compiles the index, said today, according to Hungarian news agency MTI. “Other data has shown how stockpiles of finished goods have increased, potentially flattering headline GDP growth numbers and any attempts to shift them could hit both output and pricing – neither trend will have the Fed dashing to tighten”.
The slowdown will probably be short-lived as US consumer spending remains healthy, Bradley Holcomb, chairman of the ISM factory survey, said on a conference call with reporters. I do not think it is enough on its own to derail a hike, but it certainly does not help. USA stocks trimmed gains.
Ten industries report contraction in November, in the following order: apparel, leather, and allied products; plastics and rubber products; machinery; primary metals; petroleum and coal products; electrical equipment, appliances, and components; computer and electronic products; furniture and related products; fabricated metal products; and chemical products. According to the report, a PMI above 43.1 percent, over a period of time, generally indicates an expansion of the overall economy.
Factory employment rose to 51.3.
The ISM index has declined for five straight months now.
“The good news is that the much more important services sector continues to do very well, benefiting from solid domestic demand”.
US manufacturers have been squeezed this year as a strong dollar and weak economies in China and other key foreign markets have cut into exports.
Because of less economic growth worldwide, the dollar has appreciated almost 14 percent against a grouping of major currencies from a year ago.
“The trade indicators in the ISM suggest that exports are falling faster than imports”.
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Only five of the 18 manufacturing sectors in the USA actually grew.
