Pain in America’s manufacturing sector deepened in November as activity contracted for the fourth straight month, according to an industry survey released Monday.
Amid a slowing global economy and trade wars, weak demand again ate into production of metals, wood products, plastics, appliances, oil, furniture and textiles, according to the Institute for Supply Management’s monthly report.
Inventories and prices fell for the sixth month in a row while backlogs were the lowest in nearly four years.
ISM’s index edged down two tenths of a point to 48.1 percent, falling below economists’ expectations and marking contraction at a faster rate than in October. Any reading below 50 indicates contraction.
The numbers hit Wall Street, with the Dow Jones Industrial Average down more than 200 points shortly after 1600 GMT.
“Demand’s the big story here,” Timothy Fiore, chairman of ISM’s manufacturing survey, told reporters.
“Without demand coming back, in part supported by new export orders, this is where we’re going to be.”
Any ripple effects from October’s nationwide strike at General Motors plants had largely subsided, he added.
New orders and export orders fell, along with employment.
Survey respondents continued to complain of tariffs, trade uncertainty and weak orders, which could drag down business investment, a key part of the economy.
A petroleum and coal company said the business slowdown had caused it to cut spending plans through 2021.
“The order book continues to shrink below our forecast levels,” said a fabricated metal goods company.
Appearances to the contrary, President Donald Trump has insisted the US manufacturing sector is in good health despite the trade war, which has hit manufacturers particularly hard by increasing costs, closing off export markets and making companies skittish about investing.
However, economists say the wider economy can continue to grow despite a downturn in the manufacturing sector.
“This is disappointing,” Ian Shepherdson of Pantheon Macroeconomics said in a client note, adding that a “charitable” view is that the sector is “bouncing along the bottom.”
“We’d be surprised to see a further significant decline but the sector is stuck in a mild recession with little prospect of a real near-term revival.”