CHICAGO Declines in new
orders, inventories and employment helped drive the November
manufacturing purchasing managers index (PMI) down 2.2
percentage points compared with the previous month, according
to the Institute for Supply Management (ISM).
"This months reading
reflects the lowest level since July 2009," ISM manufacturing
business survey committee chairman Bradley J. Holcomb said in a
The new orders index fell to
50.3 percent from 54.2 percent; the inventories index fell 5.0
points to 45.0 percent and the customers inventories
index fell 6.5 points to 42.5 percent; and the employment index
fell 3.7 points to 48.4 percent, the lowest reading since
"The fiscal cliff is the big
worry right now," said a survey respondent in the metal
fabrication industry. "We will not look toward any type of
expansion until this is addressed. If the program ... put in
place is more taxes and big spending cutswhich will push
us toward recessionforget it."
Metal producers and fabricators
reported a decline in business in November compared with
October. New orders and order backlogs shrank for both sectors.
Fabricators had higher production rates, while metal producers
saw output decline. Employment grew among metal producers but
fell among fabricators.
Both sectors reported lowering
their inventories and said that inventories among their
customers had become too low.
Although the price index fell
2.5 points to 52.5 percent in November, aluminum and hot-rolled
steel prices rose, survey respondents said. Metal producers and
fabricators reported paying higher prices for raw
Fabricators reported an increase
in export orders last month while primary metal exports
declined, but both sectors saw imports decline.
Comments by members of the
Chicago chapter of the ISM were mixed. "The economy really
seems to be hanging on a thread," one purchasing manager said.
"I do not think that upward price movements can be sustained at
a time when real growth is questionable."
Another said that a slowdown in
sales is "becoming very alarming."
But one manufacturer said, "We
are officially swamped and doing everything we can to get our
machines out this year. Some will bleed into 2013."