While a report released by the Institute for Supply Management on Wednesday showed that activity in the U.S. manufacturing sector expanded for the sixteenth consecutive month in November, the pace of growth in the sector slowed compared to the previous month.
The ISM said its manufacturing index edged down to 56.6 in November from 56.9 in October, although a reading above 50 indicates continued growth in the manufacturing sector. Economists had expected the index to slip to a reading of 56.5.
A significant slowdown in the pace of production growth contributed to the slower pace of overall growth in the sector, with the production index falling to 55.0 in November from 62.7 in October.
New orders also increased at a slower pace than in the previous month, with the new orders index sliding to 56.6 in November from 58.9 in October.
The report also showed a slowdown in the pace of employment growth, although the employment index showed a much more modest decrease to 57.5 in November from 57.7 in October. The index still indicated the twelfth consecutive month of job growth in the manufacturing sector.
Meanwhile, the inventories index rose to 56.7 in November from 53.9 in October, indicating an acceleration in the pace of inventory growth.
On the inflation front, the ISM said that the prices index slipped to 69.5 in November from 71.0 in October, although it still pointed to the seventeenth consecutive month of price growth.
Norbert Ore, chair of the ISM Manufacturing Business Survey Committee, said, "Manufacturing continues to benefit from the recovery in autos, but those industries reliant upon housing continue to struggle."
Friday morning, the ISM is due to release a separate report on activity in the service sector in the month of November. The index of activity in the service sector is expected to edge up to 54.5 from 54.3 in the previous month.
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