New Orders Surge, US Manufacturers Expand Pace
$SOY, $UNG, $USD
US manufacturers expanded at a faster pace in November as new orders surged, a positive sign for domestic economic growth heading into Y 2019.
The Institute for Supply Management, an association of purchasing managers, said Monday its manufacturing index rose to 59.3 last month from 57.7 in October. Readings above 50 point to growth and manufacturers have expanded for the past 27 months.
New orders rose in November, while production and employment also saw gains.
Out of 18 industries, 13 reported growth last month, including computer and electronic products, textiles, food and beverages and transportation equipment.
The gains suggest solid growth for factories during Q-1 of Y 2019.
“It says Q-1 should be pretty good, especially January and February,” said Timothy Fiore, chair of the ISM manufacturing business survey committee.
The gains reflect the US economic demand and that the strength could hold as the worlds economies begin to grow again.
We believe that growth in the sector will continue over the coming months as the USD weakens, dollar, stronger global growth and the continuing tailwinds from fiscal stimulus fuel demand.
Manufacturers will be helped by Sunday’s agreement between the US and China to prevent tariffs from escalating next year. The countries are in a mitigating trade dispute as President Donald Trump seeks to reduce the trade imbalance with China and stop the theft of IP (intellectual property).
Saturday, President Trump agreed not to increase taxes on $200-B of Chinese imports on 1 January 2019, while China agreed to purchase huge amounts of soybean and LGN and other American goods.
The Trump Administration also decided to keep talks ongoing for the next 90 days.
Several companies surveyed for the ISM index said that the tariffs had been increasing prices, including a furniture maker and petroleum and coal products company, that was to be expected.
Making and Keeping America Great!