US: November ISM manufacturing trends upward - Nomura
|Research Team at Nomura, notes that the US Institute for Supply Management (ISM) reported that activity in the manufacturing sector expanded in November for the third consecutive month, as the headline manufacturing index improved to 53.2 from 51.9 in October.
Key Quotes
“The underlying details suggest that activity continued to expand at a healthy pace. The production index improved 1.4pp to 56.0 from the October reading of 54.6, implying that on balance manufacturers increased production activity. The production index has been steadily trending back up after declining below 50 in August. Moreover, this momentum may likely continue in the near term as new orders index marked 53.0, a modest pick-up of 0.9 from the prior month.”
“Other details in the report portrayed a positive picture on the manufacturing sector. The prices paid index remained unchanged at 54.5, suggesting the prices paid by purchasing managers grew at a steady pace. The trade indicators slowed slightly but continued to report expansion. The index for new export orders slipped slightly to 52.0 from 52.5, and the index also fell slightly by 1.5pp to 50.5. Despite the slowdown, the trend suggests that foreign demand for domestically-produced goods remained steady on balance.”
“As for the labor market, the employment index slipped slightly to 52.3 from 52.9, implying that hiring activity was slower than in the prior month but still steady in the manufacturing sector.”
“This manufacturing survey is broadly in line with other incoming data, which suggest business activity was not materially affected by uncertainty surrounding the presidential election. The next major report for November is the BLS’ Employment Situation Report scheduled for tomorrow. We forecast that nonfarm payrolls increased by 160k in November (Consensus: 180k), comparable with the gains seen in October.”
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