NEW YORK – Growth in U.S. manufacturing slowed in November but remained comparatively robust, while a cut in prices paid by companies signaled tamer inflationary pressures, according to an Institute for Supply Management survey.
The Institute for Supply Management said its index of national factory activity eased to 58.1 in November from 59.1 in October. However the reading was above economists' median forecast for a drop to 57.5.
A reading above 50 denotes expansion in the sector, which has been growing since February, 2003. The index has shown recent strength, holding above 58.0 since September from a reading of 53.6 in August.
The ISM's prices gauge fell to 74.0 from 84.0 in October.
"This ISM number is right in line with expectations," said Pierre Ellis, senior economist at Decision Economics in New York. "There is good news in the prices paid index which fell 10 points. In the Chicago survey yesterday that component had leaped and there had been great concern that that would happen with the ISM index today."
On Wednesday, the National Association of Purchasing Management-Chicago said the prices paid measure in its business activity index soared in November to 94.1 from 79.6 in October.
The reduced ISM prices helped ease fears of rising inflation in the U.S. economy. Overall however, the prices gauge remains comparatively high, well above the July reading of 48.5.
The ISM's employment gauge rose to 56.6 from 55.0 in October, while new orders, a signal of future growth, eased to 59.8 from 61.7.
"Manufacturing is much stronger than I expected it to be at this time of the year," said Norbert Ore, chair of the ISM business survey committee, adding "it looks like we could enter the first quarter of 2006 with a lot of momentum."