The Final US Markit Manufacturing PMI increased to 54.1 in November of 2016 from 53.4 in October and above flash estimates of 53.9. It is the strongest reading since October last year as output rose the most in 20 months, payrolls increased and cost inflation slowed.
A sharp and accelerated rise in new business volumes was reported by manufacturing companies during November. This was mainly driven by domestic sales, as new orders from abroad increased only marginally since the previous month, with survey respondents citing competitive pressures and the strong dollar. Anecdotal evidence suggested that improving U.S. economic conditions and greater confidence among clients had led to rising levels of new work.
Mirroring the trend for new business, latest survey data highlighted the steepest rise in production volumes since early-2015. Increased manufacturing output has now been recorded for six months in a row, and the latest expansion was faster than the post-crisis trend. Alongside stronger sales, higher production also reflected efforts to boost inventories. Stocks of finished goods have risen in each of the past two months, in contrast to the declines seen through the third quarter of 2016.
Improving demand conditions resulted in a sustained accumulation of unfinished work across the manufacturing sector in November. Backlogs have now risen for six months running, which is the longest continuous period since late-2015.
Renewed pressures on operating capacity resulted in a moderate increase in payroll numbers. Some firms linked greater staff recruitment to more confidence regarding the business outlook. This also contributed to further increases in input buying and pre-production inventories at manufacturing companies in November.
Despite rising purchasing activity, supplier lead times were broadly unchanged in November. Moreover, input cost pressures remained moderate, and the rate of inflation eased from October’s two-year peak. Factory gate charges also increased at a slower pace in November, reflecting weaker cost pressures and intense competition for new work.
12/1/2016 3:07:35 PM