January 02, 2025 at 02:45PM
Prior was 49.7
Mid-month reading was 48.3
Output falls to 18 month low
New orders decline accelerates after near-stabilization in November
Export orders fall more than domestic orders, weakness in Europe and Australia
Employment continues modest growth for second month
Input cost inflation jumps to highest since August
Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence
“The mood among US manufacturers brightened in
November, though any feel-good factor has yet to feed
through to higher output on the factory floor.
“Optimism about the year ahead has improved to a level
not beaten in two and a half years, buoyed by the lifting
of uncertainty seen in the lead up to the election, as
well as the prospect of stronger economic growth and
greater protectionism against foreign competition under
the new Trump administration in 2025.
“In contrast, current production levels fell for a fourth
straight month in November, dropping at a rate not
exceeded for nearly one and a half years. The gap
between expected future output and actual current
output is now the widest seen for a decade if the
pandemic is excluded, underscoring the marked
divergence between tough current conditions and the
mounting expectation of better times to come.
“Demand conditions need to improve alongside the
improvement in confidence to encourage producers
to raise production. However, although export sales
continue to fall sharply, we note that November’s fall
in overall new orders was the smallest seen over the
past five months, hinting that the downturn in domestic
demand for goods is easing and could help revive the
manufacturing sector as we head into 2025.
“The promise of protectionism has meanwhile led to an
increase in input buying by some US producers, as they
seek to front-run price hikes on imports from threatened
tariffs. One in four companies reporting higher input
purchases in November attributed the rise to tariff
threats, underlying US manufacturers’ concerns over the
inflationary impact of tariffs.”
There is some real optimism about the change in administration but that will need to turn into orders in the months ahead or there is going to be a quick change here.
This article was written by Adam Button at www.forexlive.com.
