The ISM Manufacturing Index showed an improvement in November, in line with market expectations. According to analysts at Wells Fargo, the report is the first sign of a thaw in the supply chain crisis. They warn that it is way too early to say that things are materially improving, but it is a welcome sign that 2021 could bring with it a return toward stability.
Key Quotes:
“We are not out of the woods by any means, but wait times for supplier deliveries and prices both fell by more than three points in November. The fact that this occurred alongside an improvement in orders and employment makes this ISM manufacturing release the best report card for the manufacturing sector that we have seen in months—a welcome indication that the choke points in the supply chain are clearing, if only incrementally.”
“Today’s ISM manufacturing index for November came in at 61.1 and lands in the center of a week defined by increased financial market volatility surrounding the Fed’s inclination to accelerate its tapering plans. Financial markets are struggling to determine whether the economy is actually overheating or if activity is already moderating somewhat, a task made more difficult by the latest variant of the virus that has set the timetable for the economy for nearly two years.”
“Some manufacturers are starting to find the help they need. The employment component rose to 53.3 in November. That is the highest reading since April and suggests that this Friday's jobs report could see a hiring boost in the manufacturing sector.”
