Cooling Trend in U.S. Manufacturing PMI, Asian Air Cargo Bounces Back in November

U.S. manufacturing activity slowed in November as the S&P Global Purchasing Managers’ Index (PMI) slowed to 52.2 points from 52.5, snapping a four-month positive streak.

The agency explained that operating conditions improved due to the “ solid increase” in production and employment levels, as well as in business confidence following the end of the government shutdown and the prospect of interest rate cuts.

However, there was a “considerable slowdown” in demand partially driven by weak sales. This resulted in an “unprecedented increase” in finished goods inventories for the second consecutive month.

Inflationary pressures remained at historically high levels on account of tariffs, which drove up input costs.

U.S. manufacturing activity slowed in November

However, companies were less successful in passing these cost increases on to selling prices. The reason is that selling prices advanced at one of the slowest rates so far this year due to intense competition and low demand.

“The more you look at the situation, the more troubling the state of the U.S. manufacturing sector becomes; manufacturers are producing more goods, but often can’t find buyers for these products,“ warned S&P Global Market Intelligence chief business economist Chris Williamson.

“Meanwhile, profit margins are being squeezed by a combination of disappointing sales, fierce competition and rising input costs, the latter largely affected by tariffs,“ he added.

Asia picks up shipments to the US in the middle of peak season

The easing of tariff tensions between Washington and Beijing has partially revived air cargo from China to the US, which in the third week of November was only a few points below 2024 levels, according to WorldACD. The lowering of tariffs linked to the fight against fentanyl, from 20% to 10%, has allowed US companies to bring forward orders for the holiday season, alleviating months of double-digit declines.

The rebound is not uniform: the closure of the de minimis regime continues to weigh on shipments from Hong Kong, still 15% down year-on-year, and pre-Thanksgiving demand generated weekly setbacks in China (down 4%) and Hong Kong (down 1%). Even so, pressure on capacity remains high, especially in Southeast Asia, where Vietnam, Thailand and Malaysia recorded weekly declines despite very strong year-on-year growth.

Rising volumes have boosted spot rates for the sixth consecutive week, up 3% to $5.63 per kilo. Although prices are still below a year ago, the gap has narrowed to 8%, the smallest differential in 22 weeks. For the year-end peak, forwarders anticipate further tightening on key routes such as Vietnam-US, forcing shippers to book several days in advance to secure space.