November factory report confirms weak second half

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Updated Dec 7, 2012

If it seems like manufacturing-related freight has slowed in the second half, that’s because it has. At least the November survey of executives by the Institute for Supply Management supports that.

The leading growth area for November was Petroleum & Coal Products.The leading growth area for November was Petroleum & Coal Products.

“This month’s PMI reading reflects the lowest level since July 2009, when the PMI registered 49.2 percent,” says Bradley Holcomb, ISM chair. PMI stands for Purchasing Managers Index, and November’s rate was 49.5.

That is “a decrease of 2.2 percentage points from October’s reading of 51.7 percent, indicating contraction in manufacturing for the fourth time in the last six months,” Holcomb says.

One of the anonymous comments released by ISM noted the uncertainty of how Congress will deal with the mandated spending cuts and tax increases due to take place Jan. 1: “The fiscal cliff is the big worry right now. We will not look toward any type of expansion until this is addressed; if the program that is put in place is more taxes and big spending cuts — which will push us toward recession — forget it.”

ISM noted these areas showing growth during November (in order): Petroleum & Coal Products; Paper Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Computer & Electronic Products.

The 11 industries reporting contraction in November (in order): Apparel, Leather & Allied Products; Wood Products; Primary Metals; Transportation Equipment; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Plastics & Rubber Products; Machinery; and Printing & Related Support Activities.

Where are you seeing freight activity picking up or dropping off?