By Xavier Fontdegloria


Factory activity in the U.S. grew robustly in November, albeit at the slowest pace in 11 months as labor and supply bottlenecks continued to hit production, according to a survey of purchasing managers released Wednesday.

The IHS Markit final U.S. Manufacturing Business Activity PMI stood at 58.3 in November, marginally down from 58.4 in October, and below the preliminary estimate of 59.1.

Economists polled by The Wall Street Journal expected the index to be unchanged from its preliminary reading.

The indicator suggests that the U.S. manufacturing sector is growing, as a reading above 50 indicates an expansion of activity. However, the PMI was boosted in particular by the further near-record lengthening of supplier lead times and increased inventory building, while production continued to be crippled and new order inflows slowed.

"While demand remains firm, November brought signs of new orders growth cooling to the lowest so far this year, linked to shortages limiting scope to boost sales and signs of push-back from customers as prices continued to rise sharply during the month," said Chris Williamson, chief business economist at IHS Markit.

In a sign that supply-chain bottlenecks could start to abate, supplier delivery delays eased to the lowest for six months, the report said.

However, widespread shortages of inputs meant production growth was again severely constrained to the extent that the survey is so far consistent with manufacturing acting as a drag on the economy during the fourth quarter, Mr. Williamson said.

Longer lead times, supplier shortages and higher energy prices pushed the rate of cost inflation to a fresh series high. Although firms still sought to pass on greater costs to clients, the pace of increase in prices charged slowed to the softest in three months, the report said.


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(END) Dow Jones Newswires

December 01, 2021 10:19 ET (15:19 GMT)

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