Economic Snapshot: Manufacturing sector retracts for first time in 3 years
Economic activity in the manufacturing sector contracted for the first time in 36 months, since November 2012. However, the overall economy grew for the 78th consecutive month.
ISM manufacturing index
The ISM Manufacturing Index registered 48.6 percent in November, a decrease of 1.5 percentage points from the October reading of 50.1 percent.
The New Orders Index registered 48.9 percent, dropping 4 percentage points from the October reading. The Production Index registered 49.2 percent, 3.7 percentage points below the October reading.
The Employment Index registered 51.3 percent, an increase of 3.7 percentage points from the October reading. The Prices Index registered 35.5 percent, a decrease of 3.5 percentage points from October, which indicates lower raw materials prices for the 13th consecutive month.
The New Exports Index registered 47.5 percent, unchanged from October, and the Imports Index registered 49.0 percent, up 2 percentage points from the previous month.
Ten of the 18 manufacturing industries reported contraction in November. Five industries reported growth.
ADP employment
Private-sector employment increased by 217,000 from October to November. This is the first reading above 200,000 since June 2015.
Large businesses contributed heavily to the increase, adding 74,000 jobs in November compared to 37,000 in October. Small businesses added 81,000 jobs in November, down from 91,000 in October; medium businesses added 62,000 jobs this month, marginally fewer than the 67,000 added in October.
Service-producing employment rose by 20,000 in November, a strong increase from 174,000 the previous month. Professional/business services contributed 59,000 jobs, the largest increase for this sector since June. Trade/transportation/utilities grew by 30,000, slightly off from 36,000 in October. Financial activities added 9,000 jobs.
Goods-producing employment rose by 13,000 jobs in November, down from 22,000 in October. The construction industry added 16,000 jobs after gaining over 30,000 in each of the previous two months. Manufacturing added 6,000 jobs in November, rebounding after two straight months of job losses.
ISM non-manufacturing index
The ISM Non-Manufacturing Index registered 55.9 percent in November, 3.2 percentage points below the October reading of 59.1 percent. This represents continued growth in the sector at a slower rate. Economic activity in the non-manufacturing sector grew in November for the 70th consecutive month.
The Business Activity Index dropped 4.8 percentage points to 58.2 percent, reflecting growth for the 76th consecutive month at a slower rate. The New Orders Index registered 57.5 percent, falling 4.5 percentage points from October.
The Employment Index fell 4.2 percentage points to 55 percent in November but still indicates growth for the 21st consecutive month. The Prices Index increased 1.2 percentage points to 50.3 percent, indicating prices increased in November after two consecutive months of decreases.
Twelve of the 18 non-manufacturing industries reported growth in November and six industries reported contraction. Among those reporting contraction are Arts, Entertainment & Recreation and Fishing & Hunting.
