MNI BRIEF: US Manufacturing Bracing For 'Soft' Contraction-ISM

U.S. manufacturing is still on the path to a "soft" contraction after activity grew at the slowest pace in more than two years in November, Institute for Supply Management chair Timothy Fiore said Thursday, adding that he doesn't see much scope for prices to continue to fall further.

The ISM manufacturing PMI is likely to settle in a range around 48 to 52 but not crater further to the low 40s, he told reporters on a conference call. "Nothing that comes out here indicates that the sky is falling," he said, adding he is sticking to his view of the outlook he laid out last month. (See: MNI INTERVIEW: US Manufacturing Heads For Mild Contraction-ISM)

The ISM manufacturing index fell 1.2pp to 49.0 in November, below expectations and the lowest since the coronavirus pandemic began. Readings below 50 indicate contraction. The manufacturing survey also showed price pressures broadly moderating, falling 3.6ppts to 43.0 and the lowest since May 2020, but Fiore said he doesn't see more downside to the subindex and isn't expecting it to fall into the 30s.