District Fed surveys expected to show worst of manufacturing slowdown over

Canvasses of local firms conducted by the Federal Reserve Banks of New York, Philadelphia and Kansas City will provide early glimpses at manufacturing activity in November and will allow us to do some spade work on the Institute for Supply Management's (ISM) national report. All headline readings are expected to improve during the reference period, with two out of three reentering positive territory. 

The net percentage of respondents noting a pickup in business activity in the Empire State Manufacturing Survey is expected to remain below water at -6.5% this month, but much improved from the -13.7% average reading posted over the August-October span. The corresponding measure in the Philadelphia Business Outlook Survey probably jumped from -4.5% in October to a three-month high of 3.0%. 

The contraction in factory business in the Kansas City district that began in March likely ended this month, with an anticipated composite index reading of 3. Taken together, the projections would be consistent with the ISM Purchasing Managers' Index climbing by a little less than one percentage point to 51.0%.