The US manufacturing sector continues to expand, but at the lowest rate since the coronavirus pandemic recovery began, according to the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.
Its Manufacturing ISM ‘Report On Business’ shows the October Manufacturing PMI of 50.2% is 0.7 percentage points lower than the 50.9% recorded in September, indicating expansion in the overall economy for the 29th month in a row after contraction in April and May 2020.
However, the figure is the lowest since May 2020, when it registered 43.5%. The New Orders Index remained in contraction territory at 49.2%, 2.1 percentage points higher than the 47.1% recorded in September.
The Production Index reading of 52.3% is a 1.7-percentage point increase compared to September’s figure of 50.6%, while the Prices Index registered 46.6%, down 5.1 percentage points. This is the Index’s lowest reading since May 2020 (40.8%). The New Export Orders Index reading of 46.5% was also down, 1.3 percentage points on last month.
“The US manufacturing sector continues to expand, but at the lowest rate since the coronavirus pandemic recovery began,” explains Timothy Fiore, chair of the ISM. “With panellists reporting softening new order rates over the previous five months, the October index reading reflects companies’ preparing for potential future lower demand.
“In the meantime, demand eased, with the New Orders Index remaining in contraction territory, New Export Orders Index below 50% for a third consecutive month and at a faster rate of contraction, Customers’ Inventories Index remaining at a low level, with the same reading as in September and Backlog of Orders Index slipping into contraction.”
Despite this, the apparel manufacturing industry stood out. Of the 18 manufacturing industries in the PMI, apparel headed the nine industries reporting employment growth in October, followed by leather and allied industries.
The same two industries also reported growth in new orders in October, while textile mills were one of 12 industries to report a decline.
Apparel, textile mills, and leather and allied industries reported slower supplier deliveries in October, but the former two reported paying less for raw materials.