Unusually Strong Growth Rates In ISM Manufacturing Sample

Re-acceleration to unusually strong rates of growth is November's theme for ISM's manufacturing sample. The headline composite of 59.3 is 1.6 points higher than October and easily tops Econoday's top estimate. And new orders, at 62.1, are up 4.7 points and quickly back over 60 where, in one of the longest runs in the long history of this report, it had held for a year-and-half.

Backlogs continue to build strongly, up 8 tenths to 56.4, and are underscoring demand for labor as employment increased 1.6 points to 58.4. Production is at 60.6 with supplier deliveries at a very elevated 62.5 and continuing to be stretched. Inventory data are mixed with raw materials rising moderately but finished goods easing. An easing in input costs is a positive in the report, down nearly 10 points to a less severe 60.7.

Lack of acceleration in export orders, holding at a modest 52.2, is a negative in the report as is lack of breadth among the 18 industries as three reported contraction in the month, including primary metals, with two reporting no change. Tariff pressures as well as material and labor shortages remain common areas of concern in the sample.

This sample has been consistently running hotter than definitive data out of the factory sector yet the general indication has been very accurate: rising rates of growth.