After 41 months of growth, manufacturing stalls out

Tempe, Ariz. -- Pointing to slowing growth ahead, manufacturing activity subsided—failing to grow at all, for the first time in more than three years, the nation's purchasing managers reported.

Raising questions about what lies ahead for the overall economy, manufacturing activity declined for the first time following 41 straight months of growth, said a closely studied appraisal of smokestack America compiled each month by the Institute for Supply Management (ISM).

In its monthly update on the manufacturing sector, the ISM said its Purchasing Managers' Index fell 1.7 percentage points to a reading of 49.5%, as overall activity in the sector turned down. A reading of 50.0 or more indicates an expansion in the sector, while anything less than that points to a contraction in this key driver of the American economy.

"In November, manufacturing activity declined to its lowest level in 42 months as the PMI fell to 49.5%," said Norbert Ore, chairman of the ISM's Manufacturing Business Survey Committee. "The last time the Purchasing Managers' Index registered below 50 was April 2003," when it fell to a level of 46.5%, he added.

Scoping out specific index components, "New orders and production both ended growth cycles at 42 months during November," said Ore. New orders fell by 3.4% to a level of 48.7, while production fell 3.4% to a reading of 48.5. Employment dropped off by 1.6% to 49.2. In more vexing news for manufacturers, the price they pay for raw materials and supplies jumped by 6.5% in November to a level of 53.5 after subsiding and providing some relief in October.

Manufacturers' inventories grew by 0.3% to a level of 49.7, while their customers' inventories fell by 1.5% to a reading of 50.5%, suggesting a need for them to reorder. In some good news, order backlogs, while still in contraction, grew by 2.0% to a level of 46.5%.

Colleen Bohen | Contributing Editor

Covering the Gifts and Decorative Accessories sector.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.


HTT Current issue for September 2017

See the September 2017 issue of Home & Textiles Today. In this issue, we look at the Attack of the Killer Third Tier: Monster off-pricers are climbing to the top of the food chain, plus New Products: 40 pages of new products debuting at the New York Home Fashions Market; Home Stores: TJX unveils first U.S. HomeSense store; Clicks to Bricks: Boll & Branch moves from digital to physical retailing; and much more... See details!