The best reading in a long time. New orders seem to be reaccelerating. So is employment, indicating that manufacturers are reasonably confident that the trend is for real. Backlogs remain below 50, but barely.
The Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) signalled the strongest improvement in U.S. manufacturing business conditions for five months in November. The preliminary ‘flash’ PMI reading, which is based on around 85% of usual monthly replies, rose to 52.4 from 51.0 in October to indicate a moderate manufacturing expansion overall.
Manufacturers reported a further rise in output during November, with a number of companies attributing this to larger volumes of new work. Moreover, production increased at the strongest rate since June, having quickened from the near-stagnation recorded two months previously.
Incoming new work at manufacturing firms rose for the thirty-ninth successive month in November. Survey respondents linked the rise in new orders to greater client demand, although some panellists also commented on new work resulting from the aftermath of Hurricane Sandy. Meanwhile, new export orders were broadly stable in November, following five consecutive months of modest contraction. Overall, total new work rose moderately since October, with the rate of growth at a five-month high.
Employment in the U.S. manufacturing sector rose further during the latest survey period. Job creation has been reported in each month since February 2010, with the latest rise the strongest in four months. Where headcounts increased, monitored companies generally attributed this to greater new order requirements and the development of new products.
(…) average selling prices also increased over the month as firms generally passed on greater cost burdens to clients. Output charges rose at the fastest pace since May, but the rate of inflation nonetheless remained much weaker than that for input prices.
The quantity of inputs bought by surveyed firms increased in November, while stocks of purchases fell for a fourth consecutive month. Greater buying requirements contributed to a further lengthening of suppliers’ delivery times. The latest increase in lead times was solid and the greatest since May.