KPI – December 2023: The Brief
KPI – December 2023: State of Business
KPI – December 2023: Consumer Trends
KPI – December 2023: State of the Economy
KPI – December 2023: Recent Vehicle Recalls
Economic activity in the manufacturing sector contracted in November for the 13th consecutive month following a 28-month period of growth, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.
The Manufacturing PMI registered 46.7% in November, unchanged from the month prior.
“Demand remains soft and production execution is slightly down compared to October, as panelists’ companies continue to manage outputs, material inputs and—more aggressively—labor costs. Suppliers continue to have capacity. Sixty-five percent of manufacturing gross domestic product (GDP) contracted in November, down from 75% in October,” says Timothy R. Fiore, CPSM, C.P.M., chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.
“More importantly, the share of sector GDP registering a composite PMI calculation at or below 45% a—good barometer of overall manufacturing weakness—was 54% in November, compared to 35% in October and 6% in September. Three of the top six industries by contribution to manufacturing GDP were at or below 45%, same as the previous month.”
IMPORTANT TAKEAWAYS, COURTESY OF THE MANUFACTURING ISM REPORT ON BUSINESS:
- Demand eased, with the (1) New Orders Index contracting but at a slower rate; (2) New Export Orders Index dipping further into contraction territory; and (3) Backlog of Orders Index dropping below 40% to remain in strong contraction territory.
- The Customers’ Inventories Index reading moved into expansion, toward the upper end of “about right” territory, not accommodative for future production.
- Output/Consumption (measured by the Production and Employment indexes) was negative, with a combined 2.9-percentage point downward impact on the Manufacturing PMI calculation. Panelists’ companies slightly reduced month-over-month production and took more actions to reduce head counts, primarily using layoffs and attrition.
- Inputs—defined as supplier deliveries, inventories, prices and imports—continued to accommodate future demand growth.
- The Supplier Deliveries Index indicated faster deliveries for the 14th straight month, at a faster rate compared to October. In addition, the Inventories Index moved upward while remaining in moderate contraction territory.
- The Prices Index remained in “decreasing” territory (but just barely), signifying price stability as a result of energy markets easing, though offset by increases in the steel markets. Manufacturing supplier lead times continue to decrease, a positive for future economic activity.