US manufacturing growing at faster pace than forecast
American manufacturing grew in November at a faster pace than forecast, indicating that the US economy is riding steadily through the global slowdown.
The Institute for Supply Management, a trade group of purchasing managers, said on Monday that its factory index slipped in November to 58.7 from 59 in October, only a marginal slip.
Readings of greater than 50 indicates growth.
Over the past few months orders have been the strongest in nearly ten years, fueled by strong, increasing, demand in the domestic market. The domestic market means the suppliers and consumers (buyers) within a country’s borders, i.e. the home market, which in this case is the US market.
Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, said:
“Whatever is happening abroad, this sector seems to be shrugging it off,”
“There’s always the worry that the weakness in growth abroad eventually starts filtering into it but right now it’s not really obvious.”
Despite robust manufacturing in the US, overseas it is weakening. In China factories are barely growing and European manufacturing dropped to 50.1 in November, a 17 month low – only just in growth territory. Brazilian manufacturing has contracted for the seventh time in eight months.
But this lack of growth overseas has raised concerns among some economists, who believe that it could soon drag the US down along with it.
Ksenia Bushmeneva, an economist at TD Economics, wrote in a note to clients:
“While the U.S. economy is domestically oriented, a rising dollar in combination with struggling global activity will weigh on economic growth over the next year,”