ISM Manufacturing Comes As Expected: 56.6 On Expectations Of 56.5, Declines From October 56.9

Tyler Durden's picture

There was no 60+ ISM print as the whisper number had expected. November ISM came at 56.6 on expectations of 56.5, lower than October's 56.9. Surprisingly, three key categories declined: New Order came at 56.6 vs 58.9 prior, Employment dropped from 57.7 to 57.5, while production plunged from 62.7 to 55.0. Not surprisingly, inventories continued expanding. Exports declined and imports rose: a negative for GDP but who cares: after all the government will pull out whatever GDP number suits it. And probably the most telling admission by respondents is that the margin crunch will lead to higher prices, as expected: "Business continues to improve; however, rising material prices are
eroding margin. Increases to the consumer are inevitable in early Q1

Complete respondent perspectives:

  • "Business continues to improve; however, rising material prices are eroding margin. Increases to the consumer are inevitable in early Q1 2011." (Paper Products)
  • "International markets expanding rapidly. Domestic market is slowly rebounding." (Transportation Equipment)
  • "We're starting to see capacity at suppliers become an issue." (Machinery)
  • "Capital projects are being released, which is improving our sales." (Computer & Electronic Products)
  • "We are seeing increases in chemical prices that seem to be driven by supply/demand imbalance." (Chemical Products)

And further on the dropping margin theme, here are the commodities rising/dropping in price:


Commodities Up in Price

Aluminum (3); Caustic Soda (4); Chemicals (2); Copper (4); Copper Based Products; Corn (3); Corrugated Containers (9); Nickel; Plastic Resins; Polyethylene (3); Resins; Soybean Oil; Stainless Steel; Steel* (3); Titanium; and Titanium Dioxide.

Commodities Down in Price

Natural Gas; and Steel*.

Full report

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Bearster's picture

The price consumers are willing to pay has nothing whatsoever to do with the cost manufacturers must pay for their inputs.


SheepDog-One's picture

What do you mean? If youre a manufacturer of anything, your only concern is what price youll be able to sell for, and if you guess wrong on your input and output prices then youre toast.

sabra1's picture

Casey Research:

The almighty U.S. dollar began a rally at precisely 3:00 a.m. New York time [8:00 a.m. in London] for the second day running.  What are the chances that that was a market coincidence, you may ask?  None at all, is the answer.  Two hours later, the dollar was up to 81.35 cents... and it basically didn't move much from that for the rest of Tuesday's trading session.

gwar5's picture

"Rising material prices..."

Let the deflationists let that one soak in.

SheepDog-One's picture

As usual over the last 2 years, all market movement happened overnite, upon market open everything flatlines. 

Salinger's picture

Interesting how the expectations are a moving target


from Bloomberg expectation 57

No Mas's picture

Even funnier how ZH blasts the ISM numbers when they're really good, but seem to find them reliable if the data is not so good.

Very selective outrage it seems.

erik's picture

ISM numbers represent a USD that dropped dramatically in Sept/Oct.  The past 4 months of import/export and new orders data from ISM bears this out.  Inventories are increasing at manufacturers.

Next month's ISM release will not be quite so rosy, but should still show growth.  The USD value going forward will play a major role in manufacturing data.

Cdad's picture

And what the market will TRY REALLY HARD NOT TO SHOW US RIGHT that a plus 60 ISM guess is exactly what this engineered rally was betting on....what it was shooting its wad for.

We now return you to your regularly scheduled program of "Europe is Freakin' Doomed!"  to be followed up by "Sovereign Defaults Will Suck."  And tomorrow, "America is Next."

Oh, the amazing things that can be acheived [for an hour or two] with endless super computers and a Fed Reserve Chairman without a soul or beating American heart.  Good grief.

Gimp's picture

Yawn - more numbers.....

partimer1's picture

These numbers are a lot like those from China.  they can be whatever the f*ck they want to them to be. they can always be a beat and revise them down later.