Although still robust, manufacturing production growth moderated since the previous month and was slightly weaker than its average for 2015 so far. At the same time, latest data highlighted the softest expansion of incoming new work for just over two years. Reports from survey respondents generally cited a cyclical slowdown in demand patterns and ongoing weakness in export sales. Reflecting this, the index measuring new orders from abroad dipped back inside negative territory in November. Lower levels of new work from abroad were linked to a combination of the strong dollar and weaker global economic conditions.
In response to slower output and new business growth, manufacturers signalled greater caution in terms of their purchasing activity and inventories during November. The latest rise in input buying was the weakest since January 2014, while stocks of finished goods dropped for the fourth month running. Meanwhile, latest data showed that preproduction inventories were broadly unchanged, which contrasted with the pattern of modest growth seen throughout most of the past year-and-a-half.
Manufacturing payroll numbers were reported to have increased again in November, continuing the trend seen for much of the past six years. However, the latest expansion of employment levels was only modest and weaker than seen on average over the recovery period. Softer rates of job hiring reflected greater caution in terms of the business outlook and reduced pressure on operating capacity. This was highlighted by a drop in backlogs of work for the first time in 12 months.
Meanwhile, average cost burdens fell for the third month running, which was overwhelmingly linked to lower transportation and commodity prices. Factory gate charges increased only fractionally in November, and the rate of output charge inflation remained well below the long-run survey average.