Markit’s November Manufacturing PMI At 25-Month Low
MarketWatch reported that the latest preliminary or flash results from Markit’s US manufacturing purchasing managers index show that in November, PMI fell to 52.6, the lowest reading since October 2013, after an October reading of 54.1. Although a score over 50 indicates conditions are improving, all five of the components making up the overall PMI reading fell for November, suggesting a potential weakening across manufacturing. Business Insider reported that economists had expected the PMI to read 54, just 0.1 lower than October. However, manufacturing has continued to suffer due to “a strong dollar and weaker global demand.” 24/7 Wall Street (NY) reported that the suggested “setback for US manufacturing sector growth” that comes from the PMI reading “is not what some market watchers may be hoping for considering that there was a modest rebound recorded during the month of October,” and there was a decline “in backlogs of work” for the first time in a year. Among the declines seen on the November index “were slower rates of output, new orders and employment growth” as well as “a renewed drop in new export sales during November.” Furthermore, “pre-production inventories were broadly unchanged, which contrasted with the pattern of modest growth seen throughout most of the past year-and-a-half.” Among the common themes reported from survey participants was “a cyclical slowdown in demand patterns and ongoing weakness in export sales.”
What This Means For Small Businesses
The latest Markit manufacturing purchasing manager’s index results are a troubling signal that growth is slowing in the US manufacturing sector. In the latest NFIB report on Small Business Economic Trends, chief economist William Dunkelberg said of the current environment for business conditions, “GDP growth languished in Q3, and will not likely impress in Q4. The industrial sector is weakening and the small business sector has not returned to its historical role in the production of GDP and jobs.” It appears likely that small businesses in the manufacturing sector in particular will see continued sluggish results.
Additional Reading
NFIB previously covered results of the Markit PMI.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
