US Manufacturing Survey Disappoints, New Orders/Employment Plunge

After China’s “surprise” PMI beat…

…and Europe’s ‘bottoming’…

…the world seems convinced that everything is awesome again (despite China Industrial Profits collapsing at a record pace) and expectations were for US Manufacturing surveys to extend their rebound in November.

• Markit’s final Manufacturing PMI for November beat expectations, printing 52.6 (from 52.2 flash and 51.3 in October)

• ISM’s Manufacturing survey for November missed expectations, printing 48.1 (from 49.2 exp and 48.3 prior)

This is the highest PMI since Feb 2019.

Source: Bloomberg

According to Markit, manufacturing output and new order growth rates improve to 10-month highs with the fastest rise in employment since March, but business confidence remains subdued.

And, according to ISM, new orders and employment both contracted further…

Source: Bloomberg

Chris Williamson, Chief Business Economist at IHS Markit said:

“A third consecutive monthly rise in the PMI indicates that US manufacturing continues to pull out of its soft patch. New orders and production are rising at the fastest rates since January, encouraging increasing numbers of firms to take on more workers. Exports are also back on a rising trend, firms are buying more inputs and re-building inventories, adding to the signs of improvement.

“Some caution is needed, as these improved survey numbers merely translate into very subdued growth in comparable official gauges of manufacturing production and factory payrolls. Business sentiment also remains worryingly subdued, with expectations about future output growth well down on earlier in the year and running at one of the lowest levels seen since comparable data were first available in 2012.

“Firms remain very concerned about the disruptive effects of tariffs and trade wars in particular, both in terms of rising prices and weakened demand, though the survey also saw further worries among manufacturers that the economy could slow in the upcoming presidential election year as customers delay spending and investment decisions.”

So one is left wondering, given this global rebound in ‘soft’ survey data, whether the terrifying global depression that was forecast due to Trump’s unilateral trade war was just more “Project Fear”-driven propaganda… or is this the eye of the global trade hurricane?