U.S. manufacturing dropped for the ninth consecutive month in November as supplier deliveries, new orders, and employment plummeted, the Institute for Supply Management said in its latest Manufacturing PMI report.
The country’s factory activity registered 48.2% in November, showing a slight 0.5% decrease from October’s results. Any PMI reading below 50% indicates contraction in manufacturing activity.
The weakening was primarily driven by declining demand, with new orders falling for the third consecutive month to 47.4%, down from 49.4% in October. This continued decline in new orders signals that manufacturers are struggling with weak customer demand despite broader economic growth, according to Susan Spence, chair of ISM Manufacturing Business Survey Committee.
However, production provided the only bright spot in the report, rising significantly to 51.4% from October’s 48.2%. This divergence between falling new orders and rising production suggests manufacturers may be working through existing inventory rather than responding to fresh demand. The employment picture also deteriorated, with the jobs index falling to 44% from 46%, while order backlogs continued to shrink to 44% from 47.9%.
High-tech sectors like electronics and essential goods like food production continue doing well. However, most traditional manufacturing industries face ongoing challenges.
Three of the six largest industries expanded: Computer & Electronic Products, Food & Beverage, and Machinery. Overall, just four industries reported growth: Miscellaneous Manufacturing, Food, Beverage & Tobacco Products, and Machinery.
Most other manufacturing sectors struggled. Eleven industries saw activity decline, starting with Apparel & Leather Products, Wood Products, and Paper Products. The list also included Textile Mills, Fabricated Metal Products, Petroleum & Coal Products, Chemical Products, Nonmetallic Mineral Products, Furniture, Transportation Equipment, and Plastics & Rubber Products.
According to a respondent from the machinery industry, while new orders are meeting expectations, customers are pushing for faster delivery times. At the same time, shipping delays for imported goods are getting longer.
Meanwhile, the trade environment is forcing some companies to make major changes to their businesses due to tariffs. These changes include cutting staff, updating guidance to shareholders, and moving some production overseas that was originally planned for US export, a transportation respondent said.
