The health of the U.S. manufacturing sector in November got mixed reviews on Monday.
The influential Institute for Supply Management’s purchasing managers’ index dropped to 48.1 from 48.3, missing expectations for an improvement to 49.4. Readings below 50 indicate contraction and this index has been underwater for four months straight.
A competing purchaser managers’ survey by IHS Markit, however, showed the manufacturing sector had improved in November. The IHS Markit PMI rose to a seven-month high of 52.6.
The two indexes are calculated differently and have diverged in the past. The IHS Markit index puts greater weight on forward-looking components, so optimism about the future can boost the index above what the evenly weighted ISM index shows. The ISM survey is also more heavily weighted toward large multinational companies, which the IHS argues makes it less representative of the U.S. economy.
“ISM also does not ask respondents to confine their