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ISM manufacturing index rises in November, employment expands despite labor shortages

December 03, 2018

Economic activity in the manufacturing sector expanded in November at a faster pace than in October, according to the Institute for Supply Management’s purchasing managers index for US manufacturing. November’s index reading registered 59.3, up from October’s reading of 57.7.

Any reading above 50% generally indicates improving conditions.

The employment portion of the index rose to a reading of 58.4 in November from 56.8 in October, also indicating expansion at a faster pace.

Supplier labor issues and transportation difficulties are at more manageable levels, but they continue to limit production potential, according to the report.

“Employment continued to expand, supporting production growth,” said Timothy Fiore, chair of the Institute for Supply Management’s Manufacturing Business Survey committee. “Respondents continued to note labor-market issues as a constraint to their suppliers’ production capability.” According to Fiore, an employment index level above 50.8%, over time, is generally consistent with an increase in the US Bureau of Labor Statistics’ data on manufacturing employment.

MarketWatch reported the ISM manufacturing index easily exceeded the reading of 58.0% forecast in its poll of economists. Customer orders surged in November and production rose as well, prompting companies to hire more workers or ask current employees to work more overtime.

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