<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1018706268302959&amp;ev=PageView&amp;noscript=1">
((o
Knowledge • News • Insights
 o))
In Partnership With

PNC Chief Economist Gus Faucher: Manufacturing Expanded in November, But at Slower Pace

Michigan Business Network
December 1, 2020 3:00 PM

Working at PNC Financial Services Group: 6,167 Reviews | Indeed.com

US manufacturing activity increased for a seventh straight month in November, according to the manufacturing index from the Institute for Supply Management. The index fell to 57.5% in November from 59.3% in October; a reading of above 50 indicates expansion in the industry, but the decline in index means that pace of growth improved over the month.

Of the five subindices used to calculate the overall index, four were above the 50 level that indicates expansion in November, although new orders, production and inventories dropped over the month; new orders were still very strong at 65.1%, however. The supplier deliveries component was above 50 in both October and November and moved higher over the month. The employment component fell to 48.4% in October from 53.2% in October; the reading below 50% indicates job losses in the sector in November.

The subindices not used to compute the overall index were generally positive in November, including a growing backlog of orders, rising exports, low customer inventories, and rising prices.

Sixteen of the 18 manufacturing industries covered reported expansion in November, with the strongest growth in apparel, nonmetallic minerals and textiles. Printing and coal and petroleum manufacturing contracted over the month.

After a very steep but very short contraction in March through May, manufacturing has expanded for seven straight months as demand has picked up and businesses have reopened. The pace of growth slowed in October, but remains solid. The continued strength of new orders bodes well for further expansion in manufacturing into 2021. Record cases of the coronavirus and the potential for increased government restrictions on economic activity are near-term downside risks for manufacturing, however.

Although the overall manufacturing index has been above 50% for seven straight months, the employment component has been weaker. The employment index was below 50% ahead of the pandemic, and October was the only month it has been above 50% in more than one year. That being said, manufacturing employment has increased every month in May through October according to the Bureau of Labor Statistics; the BLS releases the employment report for November on Friday, December 4. PNC expects overall job growth of 500,000 in November, including a gain of 40,000 in manufacturing. 

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.

Image result for pnc financial services

Michigan Business Network is an online broadcasting company that provides knowledge, news, and insights into Michigan’s businesses, industries, and economy.