By Xavier Fontdegloria


Factory activity in the U.S. contracted in November for the first time since the onset of the Covid-19 pandemic in 2020 due to weak demand for goods, data from a purchasing managers survey showed Thursday.

The S&P Global U.S. manufacturing PMI fell to 47.7 in November from 50.4 in October, its lowest reading since June 2020 and broadly in line with the preliminary mid-month reading of 47.6. Economists polled by The Wall Street Journal expected the index to be unchanged from the flash estimate.

The index suggests factory activity swung to contraction in November as the index came in below the 50.0 threshold that separates expansion from contraction.

"A combination of the rising cost of living, higher interest rates and growing recession fears have led to slumping demand for goods in both the home-market and abroad," said Chris Williamson, chief business economist at S&P Global.

Goods producers reported in November a decline in output and a faster drop in new orders, while employment growth slowed as backlogs of work declined sharply, the report said.

"Companies are ... cutting production at a rate not seen since the global financial crisis, if the initial pandemic lockdowns are excluded," Mr. Williamson said. Inventories in factories remain high, suggesting further production cuts are likely to bring stocks down to more manageable levels, he said.

S&P Global data showed vendor performance improved in November for the first time in three years, signaling that supply chains are normalizing as demand weakens.

Lower activity also led to diminishing inflation pressures, according to the survey. The rate of input price inflation eased for the sixth successive month to the slowest since November 2020, while growth in output charges also moderated.

"While supply-chain worries persist ... companies' concerns are increasingly moving away from the supply side to focusing on the darkening outlook for demand, meaning the business mood remains among the gloomiest seen over the past decade," Mr. Williamson said.


Write to Xavier Fontdegloria at


(END) Dow Jones Newswires

December 01, 2022 10:18 ET (15:18 GMT)

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