The US manufacturing sector continued to grow in November but the coronavirus pandemic was still exacting a toll, particularly on employment, a survey said Tuesday.
The Institute for Supply Management's (ISM) manufacturing index was at 57.5 percent last month, slightly worse than expected but still above the 50-percent threshold indicating growth.
The report marked the seventh consecutive month of growth since the index contracted sharply in the early days of the pandemic, but November's report shows key indicators slowing as the United States weathers the world's largest Covid-19 outbreak.
"Members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that will likely limit future manufacturing growth potential," the survey's chair Timothy R. Fiore said.
New orders declined nearly three points to 65.1 percent, production by 2.2 points to 60.8 percent, and employment dropped 4.8 points to 48.4 percent, returning it to contraction in a sign of the headwinds facing workers laid off by the pandemic's business disruptions.
The data comes as the US deals with yet another resurgence of virus cases nationwide, which have in some areas reached levels unseen since the start of the pandemic.
However Fiore said the survey found firms optimistic, with more than twice as many positive comments for each negative one received.
"Suppliers are still experiencing labor shortages resulting in component constraints. However, we're seeing life from customers, so there's a positive outlook moving into the first quarter of 2021," a computer and electronic products company told the survey.
Ian Shepherdson of Pantheon Macroeconomics pointed to the 2.1 percentage point rise in new export orders to 57.8 percent as an indication that US factories are benefiting from other countries' economic recoveries.
"The US manufacturing upswing lost a bit of momentum last month, but a re-acceleration when the third Covid wave fades is a good bet," he wrote in an analysis.