US manufacturing dips in Nov '23, PMI Falls to 49.4: S&P Global

Goods producers continued to report an improvement in vendor performance in November, as lead times for inputs were reduced. Anecdotal evidence highlighted greater stocks of inputs at suppliers amid subdued global demand. The extent to which delivery times dropped was the second smallest since January, however.

Weak demand for inputs was reflected in a further contraction in purchasing activity at manufacturers. The fall in input buying was only fractional and the slowest since August 2022. However, businesses continued to run down their stocks of purchases and finished items amid improvements in supply chains, relatively subdued demand conditions and efforts to cut costs, as per S&P Global.

Margin pressures eased across the private sector, as firms raised their selling prices at a quicker pace despite a second successive monthly slowdown in the rate of cost inflation. Input prices continued to rise, but at a pace that was the slowest since October 2020 and softer than the long-run series average. Firms noted that lower energy and raw material costs dampened price increases, with some also highlighting that a reduction in workforce numbers had eased cost pressures. Manufacturers signalled a notable slowdown in input price inflation following successive monthly accelerations in the pace of increase between July and October.

Manufacturers recorded the slowest increase in factory gate charges since August amid efforts to drive new sales and remain competitive.

Looking at the employment conditions, US companies lowered their workforce numbers during November for the first time in almost three-and-a-half years. Although only fractional, employment tipped into contractionary territory. Manufacturers recorded back-to-back declines in staffing numbers.

Businesses commonly mentioned that relatively muted demand conditions and elevated cost pressures had led to lay-offs. Other companies noted that hiring freezes were in place amid pressure on margins.

Dwindling levels of unfinished business also impacted hiring decisions, as backlogs of work fell for the seventh month running midway through the final quarter of 2023. Goods producers recorded quicker contractions in incomplete business, largely due to a lack of pressure on operating capacity.

ALCHEMPro News Desk (DP)