November 2013 ISM Reports

Click image for larger version

For a second month in November, more manufacturing businesses surveyed by the Institute for Supply Management (ISM) indicated that their activity expanded than any time since April 2011. The PMI rose to 57.3 percent, an increase of 0.9 percentage point from October's reading of 56.4 percent (50 percent is the breakpoint between contraction and expansion). “With 15 of 18 manufacturing industries reporting growth in November relative to October,” said Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, “the positive growth trend characterizing the second half of 2013 is continuing.”

Click image for larger version

Most general manufacturing sub-indices were positive in November: Orders, production and employment were up; inventories were either essentially unchanged or decreasing; and input prices rose more slowly. Performance of the two manufacturing industries we track diverged, however, with Wood Products contracting but Paper Products expanding. Wood Products orders and production fell, and input prices rose. For Paper Products, orders and production rose while input prices fell.

Growth in the service sector slowed again in November. The non-manufacturing index (now known simply as the “NMI”) registered 53.9 percent, 1.5 percentage points lower than October’s 55.4 percent. New order, business activity and employment sub-indices all declined relative to October (the employment index to its lowest point since May). Nonetheless, “respondents' comments for the most part indicate the non-manufacturing sector is maintaining a steady course of incremental growth and a positive outlook for the upcoming months.” said Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee. 

Click image for larger version

Among the individual service industries we track, only Ag & Forestry expanded (thanks to new orders, higher inventories and imports). The drop in Construction employment was enough to offset increases in inventories and backlogged and new export orders. Real Estate was unchanged.

Commodities up in price included corrugated boxes. Caustic soda, gasoline, diesel and natural gas were down in price.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.