Manufacturing Up After Three Down Months

Brent Felgner, Don Hogsett, December 20, 2004

Tempe, Ariz. — Manufacturing activity grew modestly during November, bouncing back from three straight months of slowing growth, according to a report prepared by the nation's purchasing managers — the people who hold the purse strings of corporate America.

The monthly Report on Manufacturing compiled by the Institute for Supply Management (ISM) ticked up 1 percentage point during November to a reading of 57.8, up from 56.8 the preceding month.

But even with last month's recovery, the key manufacturing sector is moving at a sharply slower pace than earlier during the year, when the January index topped out at 63.4.

“November reverses three consecutive months in which the rate of growth had slowed,” noted Norbert Ore, chairman of the ISM's Manufacturing Business Survey Committee. “The manufacturing sector appears poised to end the year on a strong note as the New Orders Index made its way back above the 60 percent mark, and the Employment Index picked up significant momentum.”

The New Orders component of the index jumped 3.2 percentage points to a reading of 61.5, its highest point in recent months. And the Employment Index grew for a 37th straight month, climbing 2.8 percentage points, to a reading of 57.6.

The prices manufacturers pay for raw materials and supplies keeps rising, climbing for a 33rd straight month, but moved up at a somewhat slower pace in November. The Prices Index came in a reading of 74, easing off from a level of 78.5 in October.

November snapshot
Manufacturing benchmarks
Month-over-month percentage-point change

Source: Institute for Supply Management
Purchasing Managers' Index +1.0%
New Orders +3.2
Production -1.9
Employment +2.8
Inventories +2.5
Customers' Inventories 0.0
Prices Manufacturers Pay +4.5
Order Backlogs -1.5
Export Orders -1.9
Imports -0.1

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