News

In November, U.S. manufacturing remained in contraction but at the slowest pace of the past five months. The S&P Global U.S. Manufacturing PMI rose to 49.7 in November from 48.5 in October, barely below the 50 threshold that indicates a contraction in the sector. This suggests manufacturing conditions continued to deteriorate but to a lesser extent than the previous month.

While the rate of decline in new orders slowed sharply, output continued to be scaled back. In addition, production levels fell for a fourth consecutive month to the fastest rate in more than a year. However, rising confidence encouraged manufacturers to increase employment. The rise in employment despite a slowdown in new orders meant firms were able to reduce their backlogs of work.

New export orders also declined and at the fastest pace since June 2023, as international demand weakness worsened. Nevertheless, the downturn in domestic demand for goods is easing, which could improve conditions for manufacturers in 2025. Respondents’ optimism about the year ahead strengthened to the highest level in two and a half years, boosted by the pre-election uncertainty ending.

The pace of input cost inflation eased slightly. On the other hand, output prices increased at a slightly faster pace and was above the pre-pandemic average. As a result of tariff threats, one in four companies reported higher input purchases in November, underlying manufacturers’ concern for how tariffs may impact input prices.