US Manufacturing PMI for November improves but remains in contraction

NEW YORK (ICIS)–The ISM US Manufacturing Purchasing Managers’ Index (PMI) improved to 48.4 in November – up 1.9 points from 46.5 in October, but remains in contraction (below 50) for the eighth consecutive month, and 24 out of the last 25 months.

The November reading “was above expectations and although still contractionary, welcome news”, said Kevin Swift, ICIS senior economist for global chemicals.

However, the “rolling recession” in manufacturing continues, he added.

Only three sectors out of 18 expanded and the chemical industry again was not one of them.

Overall manufacturing production rose 0.6 points to 46.8, a less contractionary reading. New orders moved up to a slightly expansionary 50.4 reading, but order backlogs contracted at a faster pace – a 41.8 reading, down 0.5 points from October.

Both new orders and order backlogs, when combined with the reading on inventories, are good indicators of future activity, Swift pointed out.

The inventories reading fell to 41.8 versus 42.6 in October. With still contracting inventories, an uptick in orders could translate into higher production, he noted.

“Demand remains weak, as companies prepare plans for 2025 with the benefit of the election cycle ending. Suppliers continue to have capacity, with lead times improving, but some product shortages are reappearing,” said Swift.

“Customers’ inventories were deemed at the ‘too low’ level which could be positive for future new orders. Prices, however, eased back towards stable levels. Prices are sensitive to changes in supply and demand, and tend to provide a leading signal,” he added.

High mortgage rates continue to hamper demand for new housing construction, which is a key market for adhesives and sealants, one respondent in Chemical Products noted.

EUROPE WEAK, CHINA IMPROVES
Meanwhile, in Europe the HCOB Eurozone Manufacturing PMI put together and released by S&P Global contracted further to 45.2 in November versus 46.0 in October, marking the 29th consecutive month of contraction.

The Caixin China General Manufacturing PMI released by S&P Global saw an improvement to 51.5 in November from 50.3 in October – its second consecutive month of expansion.