TEMPE, AZ, Dec. 6 — Economic activity in the manufacturing sector grew in November for the 18th consecutive month, while the overall economy grew for the 37th consecutive month, say the nation's supply executives.

A report was issued today by the Institute for Supply Management (www.ism.ws) found the closely watched PMI index at 57.8% in November, up one point from October. The new orders index rose 3.2 points to 61.5%. The figures reversed a three-month slide.

"The manufacturing sector appears poised to end the year on a strong note as the new orders index made its way back above the 60% mark, and the employment index picked up significant momentum," said chairman Norbert Ore. "There is still significant upward pressure on prices as commodity price increases are common."

A PMI over 50 is considered a sign of an expansion.

Other findings: There is significant upward pressure on prices. Customer inventories are too low. Order backlogs fell in November. New export orders and imports continued to grow.

Comments from respondents this month focused on inflationary concerns. While many manufacturers are enjoying strong sales, there is concern that commodity prices are eroding profits. Energy leads the list of inflationary drivers as many commodities are derived from oil and gas feedstocks.

Production fell 1.9 points to 57% percent in November. Employment is at 57.6%, up 2.8 points.

The inventories index registered 50.7 percent in November, up from the 48.2 percent reported in October. ISM's customers' inventories index is at 43.5 percent. The prices index fell 4.5 points to 74%.

The order backlog index fell 1.5 points to 47.5%. The new export orders index was 54.7%, down 1.9 points. Imports decreased 0.1 point to 58.4% in November.

"It appears the manufacturing sector is definitely sustaining its momentum as this month's PMI strengthened slightly while continuing to indicate a gradual downward trend," said Ore. "Prices are a big issue, but the strength in new orders offsets some of those concerns as companies work to benefit from the volume."

In November, 15 industries reported growth including Industrial and Commercial Equipment and Computers, and Electronic Components and Equipment.