Growth in America’s manufacturing sector has unexpectedly fallen
to a two-year low this month.
Markit’s US flash PMI index has dropped to
52.6 in November, a hefty fall compared to October’s 54.1.
It’s the weakest reading since October 2013 (but still over the
50-point mark separating expansion from contraction).
This means U.S. firms reported that output and new orders has
slowed this month, meaning they took on new staff at a slower
rate.
Worryingly, export sales fell.
"November's flash PMI survey indicates that the manufacturing
sector lost some growth momentum after the nice pick up seen in
October," said Chris Williamson, chief economist at Markit. All
five of the index's components declined.
"Domestic demand appears to be holding up well, but the sluggish
global economy and strong dollar continue to act as dampeners on
firms’ order book growth. Export orders showed a renewed
decline, dropping for the first time in three months," he said.
But the sector is still growing, meaning the Federal Reserve
could still raise interest rates next month.
The November release "shows broad softness across US
manufacturing activity and brings the Markit series closer in
line with the ISM manufacturing index, which has indicated
stagnant conditions for the past several months," according to
Barclays economists in a client note,
Business Insider reported.
"With the trade-weighted dollar at the highest levels in over a
decade, the headwinds facing US manufacturing have yet to
subside."