WASHINGTON, (Reuters) – U.S. manufacturing activity grew in November due to strong consumer demand. However, inflation remained high because factories struggled with shortages related to pandemics.

On Wednesday, the Institute for Supply Management (ISM), reported that its index of national manufacturing activity rose to 61.1 from 60.8 in October.

If the index is above 50, it indicates that manufacturing expansion has occurred. This sector accounts for about 12% of America’s economy. Reuters polled economists and predicted that the index will rise to 61.0.

The simultaneous recovery of global economies from the COVID-19 pandemic has caused supply chain problems. This is due to factories having to wait longer for raw materials.

According to the ISM survey, supplier deliveries fell from 75.6 in October to 72.2. A reading above 50% indicates slower deliveries.

Inflation at the factory gate was fueled by long delivery times. From 85.7 in October, the survey measured manufacturers’ prices at 82.4.

Increased production costs from factories are quickly passed to customers by the factories, and there’s no sign of resistance.

Jerome Powell, the Federal Reserve Chair, told Congress on Tuesday that there was “a risk of higher inflation.” He also suggested that the U.S. central banking should accelerate the pace at which it will wind down large-scale bonds purchases during its policy meeting next week.

On an annual basis, October saw the Fed’s most preferred inflation measure increase in 31 years.

ISM survey forward-looking orders sub-index increased to 61.5 last month, from 59.8 for October. The customer inventories were still low.

Factory hiring increased as strong demand drove factories to hire more employees. The manufacturing job growth index rose seven months to its highest level. These factors, along with the strong perceptions by consumers of the labor markets last month, suggest that November saw job growth accelerate.

However, the problem of worker shortages remains a challenge. At the end September, there were 10.4 millions unfilled positions. On Friday, the Labor Department will publish its highly watched employment report on November.