US manufacturing sector shrinks for fourth straight month
The US manufacturing sector shrank at a faster rate than analysts had predicted in November, a closely-watched survey has shown, marking its fourth straight month of contraction.
The manufacturing purchasing managers’ index (PMI) from the Institute for Supply Management (ISM) fell to 48.1 in November from 48.3 the previous month. This was well below economists’ predictions of a 49.3 reading, with a score under 50 indicating contraction.
The country’s factory sector has struggled in recent months as US President Donald Trump’s trade wars have dented global demand. This trend continued in November, the ISM said, with new orders and backlogs both falling.
“Global trade remains the most significant cross-industry issue,” said ISM chair Timothy Fiore. “Among the six big industry sectors, food, beverage and tobacco products remains the strongest, while fabricated metal products is the weakest.”
As demand fell, companies compensating by laying off workers, the November survey showed. The ISM’s employment gauge fell for the fourth straight month.
The release of the data closely followed a decision by Trump to restore tariffs on steel and aluminium imports from Brazil and Argentina in the latest iteration of his protectionist policies.
The President justified his decision by saying that “Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers”.
US stock markets were lower following Trump’s decision and the ISM release. The tech-heavy Nasdaq was down 0.89 per cent, the S&P 500 was 0.49 per cent lower, while the Dow Jones was down 0.4 per cent.
More to follow.