US manufacturing activity contracts for the first time in November after May 2020

The overall economy around the World has been showing a downward trend, with high inflation hitting Europe. However, not so for the USA, and the report of ISM shows that manufacturing registered an overall 49 per cent in November, which is lower than October at 50.2 per cent but still evenly poised higher than 43.5 per cent in May 2020, which is when the pandemic lockdowns were stopped, and the economy began to recover.

The production will have some good returns for the coming months, but eventually, countries that the USA exported to, like Europe, have already begun to be affected and would buy less. Orders have been dwindling but ever so slowly at the moment. The moment the full impact of winter hits Europe and the fear of war looms large, Europe will have a hard time churning the economy.

The orders from the USA and Canada, China and Japan, the traditional suppliers to Europe for goods, would decrease phenomenally. In the USA, though, the demand is easing, and people are tightening their purses both the internal market and the exports have been grossly affected. Only the stocks of businesses are in “Just right territory” as forecasts have been low and manufacturing is facing shortages; hence not much is being done. So inventories are in the “just right” state. Both production and employment have declined in the past few months with a 2.4 % point less or negative. Two manufacturing industries have shown weak to moderate growth: (1) petroleum and coal products and (2) Transport equipment.



In the USA, six manufacturing industries reported growth in November.

(1) Apparel and clothing and allied sector

(2) Non-metallic mineral products

(3) Primary metals

(4) Miscellaneous Manufacturing

(5) Petroleum and Coal products

(6) Transportation equipment.

Meanwhile, the following 12 industries have claimed contraction in business and manufacturing:

(1) Printing and allied products:

(2) like wood,

(3) paper and

(4) textile mills.

(5) Fabricated metal products

(6) Chemical products

(7) Plastic and Rubber

(8) Electronics and computer equipment

(9) Food, beverages and tobacco

(10) Machinery

(11)Electrical equipment

(12) Appliances and components

Every sector is sluggish in growth, showing a tendency to fall. Prices are high in the market. Few are buying, but suppliers are making steady profits. The following 60 days are going to set everything further downhill. Consumer goods are slowing down, as people are buying only essentials and not willing to splurge or spend. Overall, trends show that things are not doing well, and the economy will be crashing shortly. Consumer goods are coming down, and houses have low demand. Economic activity worldwide is sinking slowly. Demand is low, but the lower prices should be passed onto us. The future seems bleak when seen through the prism of Europe and the effect of the Russia-Ukrainian war. Though labour is showing an upward trend, it is temporary and is bound to ease with time as the war worsens the scenario and kills the demand factor. Even though the price of electrical components is high, there is no production to the unavailability of supplies of raw materials. This will undoubtedly affect labour in the long run, and layoffs will occur.
Steel and Aluminium prices are low, but a lack of supplies is bound to push the prices up as stockers don’t want to release at low prices. Constant decline in orders has resulted in the economy heading for a slump.

ISM is set up by the government and helps procure more than $1 Trillion worth of goods and products. The following report is due next month in December.