US manufacturing sector cools down in November

The “flash” reading of the Markit manufacturing purchasing managers’ index fell to a 25-month low of 52.6 in November, down from a 54.1 reading in October and its lowest level since October 2013, reflecting a decline in all the five components.

Incoming new work grew at the slowest pace in over two years, the survey found, while the index measuring new orders from abroad declined in negative territory as ongoing weakness in export sales weighed on sentiment.

Markit added the latest rise in input buying was the weakest since January last year, while stocks of finished goods declined for the fourth consecutive month and pre-product inventories remained unchanged.

Payroll numbers rose again in November, maintaining a trend seen for the best part of the last six years, although the latest rate of growth was only marginal and weaker than the average reported this year.

Backlogs of work, meanwhile, declined for the first time in a year, reflecting greater cautions in terms of business outlook and reduced pressure on operating capacity.

“With the survey continuing to show modest growth, and any weakness linked to the global economy rather than a deterioration in domestic demand, there seems little in the survey results to throw up any roadblocks to a Fed that seems intent on hiking interest rates in December,” said Markit’s chief economist Chris Williamson.