Gauge of factory activity shows production rose to a 7-month high

Supply chain woes, materials shortages, prices still big issues.

A measure of U.S. manufacturing advanced in November as new orders accelerated and factories ramped up production and hiring.

The Institute for Supply Management’s gauge of factory activity increased to 61.1 — in line with expectations — from 60.8 a month earlier, according to data released Wednesday. Readings above 50 indicate manufacturing is expanding.

The group’s measure of factory production jumped to a seven-month high and new orders accelerated, underscoring how resilient consumer demand for goods and solid business investment have underpinned the manufacturing recovery.

“The U.S. manufacturing sector remains in a demanddriven, supply chain-constrained environment, with some indications of slight labor and supplier delivery improvement,” Timothy Fiore, chair of the ISM manufacturing business survey committee, said in a statement.

“All segments of the manufacturing economy are impacted by record-long raw materials and capital equipment lead times, continued shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products,” Fiore said.

The ISM figures are consistent with separate data showing firmer manufacturing results in Europe and China. Despite improvements last month at euroarea and Chinese factories, input shortages, high prices and supply chain woes remain headwinds for producers.

The ISM’S U.S. employment gauge also rose to a seven-month high, suggesting the pace of factory hiring picked up last month. While the sector has made steady progress toward returning to pre-pandemic employment levels, it has faced similar hiring challenges as other industries in attracting and retaining talent.

The government’s jobs report Friday is anticipated to show manufacturers added 42,000 workers in November, following

60,000 in October. Across all industries, employers are expected to have added over half a million jobs.

Meantime, factories continue to struggle with materials shortages, high input prices and transportation bottlenecks. A gauge of supplier deliveries, while somewhat improved last month, remains extremely elevated.

Thirteen manufacturing industries reported growth in November, led by apparel, furniture and electrical equipment and appliances.