First Signs of a Thaw in Supply Chain Crisis in Today’s ISM Report

Summary We are not out of the woods by any means, but wait times for supplier deliveries and prices both fell by more than three points in November. The fact that this occurred alongside an improvement in orders and employment makes this ISM manufacturing release the best report card for the manufacturing sector that we have seen in months—a welcome indication that the choke points in the supply chain are clearing, if only incrementally.

Prices Paid and Supplier Deliveries Both Fell in November

Today’s ISM manufacturing index for November came in at 61.1 and lands in the center of a week defined by increased financial market volatility surrounding the Fed’s inclination to accelerate its tapering plans. Financial markets are struggling to determine whether the economy is actually overheating or if activity is already moderating somewhat, a task made more difficult by the latest variant of the virus that has set the timetable for the economy for nearly two years. Through November, at least, the message from the ISM is mixed, but in our view, it signals a not too hot, not too cold expansion in the factory sector, even as supply chain constraints remain a key challenge. The prices paid measure was once again scorching hot at 82.4, but that reflects a step back from the brink after this component hit 85.7 in October. It is not enough to signal fading inflation pressure, but it does indicate that, for a moment at least, it is not getting worse. READ FULL ARTICLE>>