U.S. PMI hints at strong manufacturing growth in November

The IHS Markit survey data showed that operating conditions improved throughout the U.S. manufacturing sector in November. The seasonally adjusted manufacturing PMI came in at 53.9 in November, down from October’s 54.6. The latest index reading hinted at strong but slower, overall growth in the manufacturing sector. The latest upturn was consistent with the long-run series average. Goods producers rose their output at a rate just below that was seen in October. Anecdotal evidence implied that the rise was because of a greater order volumes and strong client demand.

New orders received by manufacturers grew at the second most rapid rate since March in November. Panellists attributed the latest rise to additional favorable demand conditions and noted more orders from domestic and foreign clients. Moreover, export sales grew at a moderate pace, but were the second most rapid in 15 months. The level of outstanding business at manufacturing companies rose at an accelerated rate that was the most marked since April. Meanwhile, employment levels rose at the second most robust pace seen since June 2015 in November.

Average prices charged by producers grew further in the month, with the rate of inflation rising to the most rapid in nearly four years. Anecdotal evidence implied the rise was because of greater cost burdens that were greatly passed on to clients. Input price inflation also rose rapidly and was steep overall.

Buying activity at goods producers grew at the most solid rate since February as companies adapted to larger new order volumes. Pre-production inventories also rose amidst reports of stockpiling. Output expectations amongst goods producers continued to be strong in November, with positive sentiment rebounding to its highest since January 2016.

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