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US Factories Shrink: Orders, Jobs Plummet for Ninth Month
4 Dec
Summary
- Manufacturing PMI fell for the ninth consecutive month in November.
- New orders dropped significantly due to tariffs and policy uncertainty.
- Manufacturers face mounting unsold inventories and squeezed profit margins.
The U.S. manufacturing sector experienced a continued downturn in November, with the ISM's Manufacturing PMI registering a decline for the ninth month in a row. This contraction was fueled by significant decreases in new orders, supplier deliveries, and employment figures, reflecting broader economic headwinds.
Survey respondents indicated that softer international orders, linked to ongoing trade tariffs and uncertainty surrounding U.S. economic policy, are contributing to the slowdown. Employment contracted at an accelerated pace, with a majority of companies prioritizing headcount management over new hiring, underscoring a cooling labor market.
Despite some regional bright spots, such as faster factory activity in New York State, the overall health of U.S. manufacturing is a growing concern. Manufacturers are producing more goods than they are selling, leading to a worryingly steep rise in unsold inventories, which could prompt future production cutbacks. Profit margins are also under pressure from disappointing sales and rising input costs.
