The Nov ISM manufacturing # was about in line at 56.6 and down a touch from 56.9 in Oct. New Orders fell 2.3 pts to a still healthy 56.6 but Backlogs remained below 50, unchanged at 46. Production, which follows orders, fell a sharp 7.7 pts to the lowest since June ’09. Manufacturing Inventories rose almost 3 pts to the most since 1984 and Customer inventories rose to the highest since May ’09. Both lend support to the belief that the inventory build story is played out and going forward must better match end demand. Export Orders fell 3.5 pts to 57 but that remains a touch above the 6 month avg. Employment fell a touch. Prices Paid fell slightly but “respondents express concerns with regard to pricing pressure.” Just 10 of the 18 industries saw growth and 6 reported a contraction. Bottom line, growth in manufacturing continues but the inventory trend and its contribution to growth bears watching short term, hopefully offset by export growth and end demand.
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