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It’s economic silver linings all around! Well, sorta, kinda, maybe.
US manufacturing contracted last month, albeit at a slower pace than the previous month, according to the latest report from the Institute for Supply Management (ISM). ISM’s Manufacturing Purchasing Managers’ Index (PMI) stood at 48.4% in November, an improvement from 46.5% in October but still indicative of sector contraction, as it’s still below the 50% mark.
But the overall economy expanded, the ISM reported, and some manufacturers are excited over the prospect of less red tape under incoming President Donald Trump, according to the ISM’s Inside Supply Management magazine.
“The business community grabbed on to the Republican win,” Timothy Fiore, who leads ISM’s manufacturing business survey committee, told reporters during a Monday conference call, Inside Supply Management reported. “There’s going to be a bit of money put into the economy and some regulations cut. We’ll see what that does to the business environment, but overall, the panelists have perceived this to be very positive.”
As for the prospects of more tariffs? Companies have gone through this before, and they “should be ready” for tariffs again, Fiore told reporters.
“Hopefully if there are tariffs (with Canada and Mexico), they’ll be short-lived,” he added.
The still-down-but-improving situation the latest Manufacturing PMI conveyed tracks with other indicators of economic sentiment that also “have risen on hopes of more business-friendly policies from the incoming Trump administration,” Reuters reported.
Fiore noted in the ISM release that manufacturing “demand continues to be weak but may be moderating.” Signs for optimism, he said, included growth in new orders, shrinking order backlogs, and customer inventories that were “only marginally above ‘too low.’”