Manufacturing expanded in October and the general U.S. economy grew for the 114th consecutive month, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business. The October PMI registered at 57.7 percent, a 2.1 percent decrease from the September reading of 59.8 percent.
The Report On Business measures its data using the Purchasing Manager’s Index (PMI), which is an indicator of economic health in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding, while below 50 percent indicates that it is generally contracting.
“Comments from the panel reflect continued expanding business strength. Demand remains moderately strong, with the New Orders Index easing to below 60 percent for the first time since April 2017, the Customers’ Inventories Index remaining low but improving, and the Backlog of Orders Index remaining steady,” said Timothy R. Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. “Consumption softened, with production and employment continuing to expand, but at lower levels compared to September.
“Inputs-expressed as supplier deliveries (increased), inventories and imports-”retained September’s levels,” Fiore added. “Continued supply chain delivery difficulties led to an increased consumption of inventory, and import expansion was stable. Lead-time extensions continue, while steel and aluminum prices are stabilizing. Supplier labor issues and transportation difficulties continue to disrupt production, but at more manageable levels.
“The expansion of new export orders softened, but five of six major industries contributed, up from two in September. Prices pressure continues, with the index returning above 70 percent. Overall, the manufacturing community continues to expand, but at the lowest level since April 2018.”
Of the 18 manufacturing industries, 13 reported growth in October, in the following order: Textile mills; electrical equipment, appliances & components; apparel, leather & allied products; plastics & rubber products; food, beverage & tobacco products; computer & electronic products; furniture & related products; miscellaneous manufacturing; machinery; transportation equipment; printing & related support activities; chemical products; and paper products.
The four industries reporting contraction in October were: Wood products; primary metals; nonmetallic mineral products; and fabricated metal products.
Commodities Up in Price
Aluminum; aluminum-based products; castings; chemicals; copper; corrugate; diesel; electronic components; freight; hydrochloric acid; metal-based products; methanol; natural gas; nylon; oil-based products; plastic molded items; plastic resins; polyethylene terephthalate (pet) products; resistors; scrap metal; steel; stainless steel; steel-based products; and sulfuric acid.
Commodities Down in Price
Aluminum; caustic soda; steel; cold rolled steel; and hot rolled steel.
Commodities in Short Supply
Aluminum-based products; capacitors; electronic components; labor; nylon; printed circuit board components; resistors; and steel-based products.
*Aluminum was reported as both up and down in price by ISM.