S&P Global: US manufacturing sector shows signs of stabilisation in Nov
The US manufacturing sector showed signs of stabilising midway through the final quarter of 2024, as the pace of decline in new orders slowed significantly, and business confidence improved.
According to the latest data from the S&P Global US Manufacturing Purchasing Managers’ Index™ (PMI®), the sector’s health marginally worsened in November, but the outlook for the coming year brightened considerably.
The seasonally adjusted PMI registered 49.7 in November, slightly below the neutral 50.0 mark but up from 48.5 in October. This marks the highest reading in five months of deteriorating conditions. While output continued to decline, the slowdown in the fall of new orders was notable, dropping at the slowest rate in five months. Some manufacturers pointed to improving domestic demand conditions following the results of the recent Presidential Election, offering hope for a recovery in the months ahead.
The decrease in new export orders, however, was more pronounced, with international demand showing signs of weakening. Despite this, firms expressed optimism about the future, with nearly half of survey respondents expecting growth in the coming year. This confidence boost was largely attributed to the anticipated policies of the incoming administration, as well as expectations for economic improvement, new order growth, and expanded capacity.
The report also highlighted a notable easing in input cost inflation, which slowed to its weakest rate in a year, although output prices were raised at a slightly faster pace. However, production continued to scale back, with factors such as hurricane disruptions, price increases, and lingering pre-election uncertainty contributing to the overall contraction.
As manufacturers navigate through challenges, the improved sentiment for 2025 suggests a potential turning point for the sector. The stability in new orders and the upbeat outlook for the year ahead indicate that, while hurdles remain, a recovery may be on the horizon for US manufacturing.
“The mood among US manufacturers brightened in November, though any feel-good factor has yet to feed through to higher output on the factory floor.” Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said.
“Optimism about the year ahead has improved to a level not beaten in two and a half years, buoyed by the lifting of uncertainty seen in the lead up to the election, as well as the prospect of stronger economic growth and greater protectionism against foreign competition under the new Trump administration in 2025.”
Attribution: S&P Global Survey
