SP Global PMI manufacturing
- Prior was 49.7
- Mid-month reading was 48.3
- Output falls to 18 month low
- New orders decline accelerates after near-stabilization in November
- Export orders fall more than domestic orders, weakness in Europe and Australia
- Employment continues modest growth for second month
- Input cost inflation jumps to highest since August
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence
“The mood among US manufacturers brightened in November, though any feel-good factor has yet to feed through to higher output on the factory floor.
“Optimism about the year ahead has improved to a level not beaten in two and a half years, buoyed by the lifting of uncertainty seen in the lead up to the election, as well as the prospect of stronger economic growth and greater protectionism against foreign competition under the new Trump administration in 2025.
“In contrast, current production levels fell for a fourth straight month in November, dropping at a rate not exceeded for nearly one and a half years. The gap between expected future output and actual current output is now the widest seen for a decade if the pandemic is excluded, underscoring the marked divergence between tough current conditions and the mounting expectation of better times to come.
“Demand conditions need to improve alongside the improvement in confidence to encourage producers to raise production. However, although export sales continue to fall sharply, we note that November’s fall in overall new orders was the smallest seen over the past five months, hinting that the downturn in domestic demand for goods is easing and could help revive the manufacturing sector as we head into 2025.
“The promise of protectionism has meanwhile led to an increase in input buying by some US producers, as they seek to front-run price hikes on imports from threatened tariffs. One in four companies reporting higher input purchases in November attributed the rise to tariff threats, underlying US manufacturers’ concerns over the inflationary impact of tariffs.”
There is some real optimism about the change in administration but that will need to turn into orders in the months ahead or there is going to be a quick change here.
