November 2018 Manufacturing Survey Growth Mixed

The ISM Manufacturing survey improved and continued in expansion. The key internals are in expansion. The Markit PMI manufacturing Index is in positive territory but declined.

Analyst Opinion of the ISM Manufacturing Survey

Based on these surveys and the district Federal Reserve Surveys, one would expect the Fed's Industrial Production index growth rate remain about the same as last month. Overall, surveys do not have a high correlation to the movement of industrial production (manufacturing) since the Great Recession. This month the ISM survey improved and the Markit surveywas declined. It is hard to understand the trends.

From Econoday:

  Consensus Range Consensus Actual
Markit Manufacturing 55.2 to 55.4 55.4 55.3
ISM Manufacturing 56.0 to 58.3 57.2 59.3

From the Markit PMI Manufacturing Index:

Output expands at joint-weakest rate since September 2017

  • Production growth eases but remains strong
  • New orders rise at fastest rate for six months
  • Employment increases solidly
  • November survey data signalled a solid improvement in operating conditions across the U.S. manufacturing sector, despite the headline PMI dipping to a three-month low. The upturn was supported by the fastest increase in new orders since May and a sharp rise in employment. Output also rose solidly, despite growth easing to the joint-weakest in over a year. Capacity pressures were also evident through a further rise in backlogs. Panellists continued to highlight stockpiling activity amid expectations of further rises in raw material prices, with input buying increasing strongly. Cost burdens rose markedly as shortages at suppliers and tariffs pushed up input prices.
  • The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers' Index™ (PMI™) posted 55.3 in November, down slightly from 55.7 in October. Although the headline figure dipped to a three-month low, it indicated a solid improvement in the health of the sector that was above the series trend.

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