Manufacturing Sector Fell Into Contraction In November.

The Institute for Supply Management reported 12/1 that its index of manufacturing sector activity dropped to 48.6 in November — the gauge’s first slide into negative territory in three years.

October’s reading had barely remained positive, at 50.1. Reuters (12/1) reported that economists had expected the index to come in at 50.5. In a statement ISM economist Bradley Holcomb said, “Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November.”

Bloomberg News (12/1, Stilwell) reports that the contraction of the manufacturing sector was “at the fastest pace since the last recession as elevated inventories led to cutbacks in orders and production.” 12/1’s ISM report “showed factories believed their customers continued to have too many goods on hand, indicating it will take time for orders and production to stabilize.” According to the AP (12/1, Boak), the index result reflected strengthening of the dollar “and low oil prices cutting new orders and hurting production.”

In a separate measurement of manufacturing activity, analytics provider Markit Economics reported that its monthly gauge of the sector rose 0.2% to 52.8. Markit chief economist Chris Williamson was cited by Business Insider (12/1, Oyedele) as saying that manufacturing growth “remains encouragingly resilient, which is all the more impressive once headwinds such as the strength of the dollar and malaise in overseas markets are taken into account.”