U.S. Manufacturing Economic Activity Expands in October
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Economic activity in the U.S. manufacturing sector expanded in October for the 27th consecutive month, and the overall economy grew for the 29th consecutive month, according to U.S. supply executives in the latest Manufacturing ISM Report on Business. The report was issued this week by Bradley J. Holcomb, chair of the Institute for Supply Management (Tempe, Ariz., USA) Manufacturing Business Survey Committee.
The PMI registered 50.8%, a decrease of 0.8 percentage point from September's reading of 51.6%, indicating expansion in the manufacturing sector for the 27th consecutive month. A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.
Of the 18 manufacturing industries, eight are reporting growth in October, in the following order: computer and electronic products; petroleum and coal products; food, beverage and tobacco products; nonmetallic mineral products; primary metals; fabricated metal products; paper products; and machinery. The six industries reporting contraction in October (listed in order) are: plastics and rubber products; chemical products; apparel, leather, and allied products; printing and related support activities; electrical equipment, appliances and components; and miscellaneous manufacturing.
The New Orders Index increased 2.8 percentage points from September to 52.4%, indicating a return to growth after three months of contraction. The Prices Index, at 41%, dropped 15 percentage points, and is below the 50% mark for the first time since May 2009 when it registered 43.5%. Inventories decreased to 46.7%, which is 5.3 percentage points below the September reading of 52%. Comments from respondents are mixed, indicating positive relief from raw materials pricing and continuing strength in a few industries, but there is also more concern and caution about growth in this uncertain economy.
The eight industries reporting growth in new orders in October (listed in order) are: petroleum and coal products; nonmetallic mineral products; plastics and rubber products; computer and electronic products; primary metals; electrical equipment, appliances, and components; food, beverage, and tobacco products; and miscellaneous manufacturing. The nine industries reporting decreases in new orders in October (listed in order) are: wood products; textile mills; chemical products; furniture and related products; printing and related support activities; paper products; transportation equipment; machinery; and apparel, leather, and allied products.
ISM's Production Index registered 50.1% in October, which is a decrease of 1.1 percentage points compared with the September reading of 51.2%, and indicates growth for the second consecutive month. An index above 51%, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.
The eight industries reporting growth in production during October (listed in order) are: wood products; primary metals; nonmetallic mineral products; food, beverage, and tobacco products; fabricated metal products; paper products; computer and electronic products; and miscellaneous manufacturing. The nine industries reporting a decrease in production in October (listed in order) are: plastics and rubber products; textile mills; furniture and related products; printing and related support activities; electrical equipment, appliances and components; chemical products; transportation equipment; machinery; and apparel, leather, and allied products.
ISM's Employment Index registered 53.5% in October, which is 0.3 percentage point lower than the 53.8% reported in September. This is the 25th consecutive month the Employment Index has been above 50%.
Of the 18 manufacturing industries, eight reported growth in employment in October in the following order: textile mills; primary metals; fabricated metal products; petroleum and coal products; transportation equipment; paper products; machinery; and computer and electronic products. The six industries reporting a decrease in employment in October (listed in order) are: plastics and rubber products; electrical equipment, appliances and components; miscellaneous manufacturing; chemical products; apparel, leather, and allied products; and food, beverage, and tobacco products.
The Inventories Index registered 46.7% in October, 5.3 percentage points lower than the 52% reported in September. The five industries reporting higher inventories in October are: textile mills; furniture and related products; computer and electronic products; food, beverage and tobacco products; and machinery. The 11 industries reporting decreases in inventories in October (listed in order) are: apparel, leather, and allied products; miscellaneous manufacturing; electrical equipment, appliances, and components; primary metals; chemical products; nonmetallic mineral products; printing and related support activities; transportation equipment; fabricated metal products; plastics and rubber products; and paper products.
More information about this report, including expanded data, is available online.
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