US manufacturing activity weakest in over a decade
Construction spending increases more than expected in November
The US manufacturing sector contracted in December by the most in more than a decade with order volumes crashing to near an 11-year low and factory employment falling for a fifth straight month, according to an industry report released on Friday.
The Institute for Supply Management (ISM) said its index of national factory activity fell to 47.2 last month from 48.1 in November. It was the lowest reading since June 2009 and thwarted expectations for a leveling off in the pace of decline in a sector buffeted by the US-China trade war.
The manufacturing sector had been under pressure for much of the second half of 2019, as tit-for-tat tariffs between Washington and Beijing slowed the flow of goods between the world's two largest economies.
ISM's employment index fell to 45.1 in December from 46.6 in November, the lowest reading since January 2016. And new orders dropped to 46.8, the lowest since April 2009, from 47.2. The prices paid index, however, registered its first reading above 50 since May, rising to 51.7 from 46.7 the month before.
Meanwhile, US construction spending rose more than expected in November and builders also spent more in earlier months than previously estimated, a sign the housing sector was giving some support to economic growth.
The Commerce Department said on Friday that construction spending increased 0.6 per cent in November, beating analysts' consensus forecast of a 0.3 per cent gain. Data for October and September was revised to show increases in spending, a reversal from previous estimates of contractions in spending during those months.
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