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Manufacturing Sector Contracts in November: Mounting Recession Worries?

By at 2 December, 2022, 11:41 am

by Raymond J. Keating –

If you were looking for good news, don’t bother with the Institute for Supply Management’s latest read on manufacturing activity. The ISM purchasing manager’s index contracted in November for the first time in 29 months.

Timothy R. Fiore, chairman of the Institute for Supply Management’s Manufacturing Business Survey Committee, reported:

“The November Manufacturing PMI registered 49 percent, 1.2 percentage points lower than the 50.2 percent recorded in October… The Manufacturing PMI figure is the lowest since May 2020, when it registered 43.5 percent. The New Orders Index remained in contraction territory at 47.2 percent, 2 percentage points lower than the 49.2 percent recorded in October. The Production Index reading of 51.5 percent is a 0.8-percentage point decrease compared to October’s figure of 52.3 percent.”

According to this report, while 6 manufacturing sectors reported growth in November, 12 industries reported contraction.

Fiore still asserted that the overall economy had continued to expand in November. Let’s hope he’s right about that, at least.

Put this assessment of manufacturing together with the latest take on consumer confidence and troubling information from the latest Beige Book, along with anti-growth policies pushed by the White House and Congress, and a Federal Reserve bent on further undermining the economy, and recession – indeed, stagflation – remains a very real worry and challenge for entrepreneurs, businesses, investors and workers.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.

 

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