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The economic expansion of the manufacturing industry eased in November, the Institute of Supply Management said today.
The Tempe, Arizona-based group’s manufacturing index, known as PMI, registered 57.5 percent last month, according to a monthly report. That was down from a hefty 59.3 percent in October.
Two key components of the PMI, new orders and production, also declined in November, ISM said. Employment fell into negative territory, according to the institute.
However, ISM said the employment was the result of manufacturers having trouble finding workers rather than job cuts.
“It’s not a lack of work, it’s a lack of people,” Timothy R. Fiore, chairman of the ISM Manufacturing Business Surveys Committee, said in a conference call.
The group said 16 of the 18 industries reported economic expansion, including clothing, fabricated metal products, primary metals, machinery, manufacturing and miscellaneous transportation equipment.
PMI is considered a leading economic indicator and barometer of where manufacturing is heading. A PMI above 50 percent indicates economic expansion, while below 50 percent indicates economic contraction. The index is based on a survey of 350 manufacturing supply executives.
The index has shown expansion for six consecutive months. The PMI has averaged 51.5 percent over the past 12 months. The index hit a low of 41.5 percent in April, a result of factory closures implemented to slow the spread of the new coronavirus (COVID-19).
Fiore said that COVID-19 remains a concern. “There is concern about future demand,” he said. “That has to do with virus fatigue.”
COVID-19 has spread across the United States this fall as colder weather has caused people to spend more time indoors. Residents in some regions have resisted wearing masks and other steps recommended by health experts to contain the virus.
There are several promising vaccines for COVID-19, but they won’t be widely available until next year.
ISM’s new orders index fell to 65.1 percent last month from 67.9 percent in October. Fifteen of the 18 industries reported an increase in orders.
The institute’s production rate fell to 60.8 percent in November from 63 percent the previous month. Fourteen of the 18 industries reported an increase in production.
The group’s employment rate was 48.4 percent in November, down from 53.2 percent in October. ISM said eight industries reported job gains, while seven said they had declined in employment.
