The November Purchasing Managers Index (PMI®) registered 61.1%, up 0.3 percentage points from October. Economic activity in the manufacturing sector grew for 18-consecutive months, according to the November Manufacturing Institute for Supply Management® (ISM®) Report On Business®. The report is based on survey responses from U.S. supply executives to the November PMI®.
"The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with some indications of slight labor and supplier delivery improvement," said Timothy Fiore, CPM, chair of the ISM® Manufacturing Business Survey Committee. "All segments of the manufacturing economy are impacted by record-long raw materials and capital equipment lead times, continued shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products."
Demand and consumption grew during the period. The Employment Index, which expanded for a third month, indicates the ability to hire is improving, partially offset by the challenges of turnover and backfilling. Inputs—expressed as supplier deliveries, inventories and imports—continued to constrain production, but there are early signs of supplier performance improving, the report notes. The Supplier Deliveries Index continued to slow, but at a slower rate, while the Inventories Index expanded more slowly. In November, the Prices Index expanded for the 18th-consecutive month, at a slower rate, indicating continued supplier pricing power and scarcity of supply chain goods.
"Coronavirus pandemic-related global issues—worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems—continue to limit manufacturing growth potential," Fiore said in the report. "However, panel sentiment remains strongly optimistic, with 10 positive growth comments for every cautious comment. Panelists remain optimistic that manufacturing growth potential can be achieved as focus surrounds improving supply-chain issues and responding to ongoing high levels of demand."
The six biggest manufacturing industries—computer and electronic products; food, beverage and tobacco products; chemical products; petroleum and coal products; fabricated metal products; and transportation equipment, in that order—registered moderate to strong growth in November, Fiore said. "Panelists' comments suggest month-over-month improvement on hiring, offset by backfilling required to address employee turnover. Indications that supplier delivery rates are improving were supported by the supplier deliveries index softening. Transportation networks, a harbinger of future supplier delivery performance, are still performing erratically."
Comments from survey respondents include:
-Bryan Mason, editorial associate