US manufacturing stalls ahead of looming fiscal cliff
US FIRMS yesterday blamed Hurricane Sandy and the oncoming fiscal cliff for a plummet in manufacturing activity to its lowest level since July 2009.
The ISM’s widely-regarded purchasing managers’ index (PMI) crashed from 51.7 in October to 49.5 in November – a level that shows a contracting manufacturing sector. Companies cited political uncertainty as the biggest issue.
“The fiscal cliff is the big worry right now. We will not look toward any type of expansion until this is addressed,” said one metals firm.
The Republican Party last night sent a letter to President Obama setting out proposals for tax reforms in a bid to head off automatic tax hikes and spending cuts in the new year, but a White House spokesperson soon dismissed the offer because it “does not meet the test of balance”.
ISM’s index for new orders, a forward-looking measure, fell even further than the headline figure, from 54.2 in October to 50.3 in November – a point indicating that the gloom will continue.