ISM Manufacturing PMI — November 2024
Headline: The Manufacturing PMI rose 1.9 points to 48.4 from 46.5, but remained in contraction for an eighth consecutive month; the pace of contraction was slower. The reading was above the six-month average of 47.5, though still within the prior six-month range of 46.5–48.7. The broader economy remained growing, with the PMI above its 42.5 breakeven line, while manufacturing remained below its 50.0 breakeven.
Sub-indices:
| Index | Level | Prior | Change | Direction | vs 6-mo |
|---|---|---|---|---|---|
| New Orders | 50.4 | 47.1 | +3.3 | Growing | 6-mo high |
| Production | 46.8 | 46.2 | +0.6 | Contracting | below avg (47.6) |
| Employment | 48.1 | 44.4 | +3.7 | Contracting | above avg (46.4) |
| Supplier Deliveries | 48.7 | 52.0 | -3.3 | Faster | 6-mo low |
| Inventories | 48.1 | 42.6 | +5.5 | Contracting | above avg (45.8) |
| Customers' Inventories | 48.4 | 46.8 | +1.6 | Too Low | above avg (47.8) |
| Prices | 50.3 | 54.8 | -4.5 | Increasing | below avg (53.2) |
| Backlog of Orders | 41.8 | 42.3 | -0.5 | Contracting | below avg (42.6) |
| New Export Orders | 48.7 | 45.5 | +3.2 | Contracting | above avg (48.0) |
| Imports | 47.6 | 48.3 | -0.7 | Contracting | 6-mo low |
Key moves:
- New Orders crossed back above 50.0 to 50.4, a six-month high and 3.8 points above its six-month average.
- Supplier Deliveries fell to a six-month low of 48.7, moving from slower to faster deliveries; Imports also reached a six-month low at 47.6.
- Prices declined 4.5 points to 50.3, remaining in increasing territory but well below the six-month average of 53.2. Employment rose 3.7 points but remained below 50.0.
Insights:
- The demand signal improved materially: New Orders returned to weak expansion at 50.4, while New Export Orders improved to 48.7. However, the forward-production picture remains constrained by Backlog of Orders at 41.8, extending its contraction streak to 26 months.
- The 5.5-point rise in Inventories to 48.1 is less concerning given New Orders’ move above 50.0 and Customers’ Inventories remaining “Too Low” at 48.4, a contrarian signal that supports future replenishment demand. Still, Production remains in contraction at 46.8, so the inventory improvement is not yet translating into output.
- Several indicators improved month over month while remaining contractionary: Production, Employment, New Export Orders and Imports. Employment’s rise to 48.1 signals slower job shedding, not manufacturing hiring.
- Supplier Deliveries moving to 48.7, a six-month low, indicates faster deliveries and less evidence of supply-chain tightness or demand pressure. This offsets some of the strength implied by the New Orders rebound.
- Input-cost pressure eased sharply: Prices remained marginally inflationary at 50.3, but the decline from 54.8 and position below the six-month average point to substantially slower cost growth and less near-term margin or goods-inflation pressure.
Breadth & prices: Three industries reported growth—Food, Beverage & Tobacco Products; Computer & Electronic Products; and Electrical Equipment, Appliances & Components—while none were listed as contracting. Input prices continued to increase, but at a markedly slower rate.
Takeaway: November suggests tentative stabilization in manufacturing demand, led by New Orders and low customer inventories, but the sector remains in its eighth month of contraction with weak production, depleted backlogs and faster supplier deliveries. The print is modestly constructive for the manufacturing cycle, but not yet evidence of a durable output recovery.