The U.S. manufacturing sector contracted in October for the eighter month in a row, following a two-month expansion preceded by 26 straight months of contraction. The ISM Manufacturing PMI® registered 48.7%, edging down 0.4 percentage points (pp) from 49.1% recorded in September. (A manufacturing PMI® above 50%, over a period of time, generally indicates an expansion of the overall economy.)
The October Manufacturing PMI® indicates the overall economy grew for the 66th straight month after last contracting in April 2020.
The Employment Index registered 46.0% in September, 0.7 pp higher than September’s reading of 45.3%. Prices Index remained in expansion (or “increasing”) territory, registering 58.0% in September, down 3.9 pp compared to the September’s reading of 61.9%, indicating raw materials prices increased for the 13th straight month. New Orders Index contracted for the second consecutive month in October after one month of expansion, registering 49.4%, an increase of 0.5 pp compared to September’s figure of 48.9%. This reading is above the 12-month moving average (49.1%) for the New Orders Index.
New Export Orders Index contracted in October, registering 44.5%, up 1.5 pp from September’s reading of 43.0%. “Ongoing trade friction is still resulting in diminished demand, as evidenced by the 57 percent of panelists’ comments citing soft demand due to tariffs and uncertain U.S. economic policy,” said Susan Spence, MBA, Chair of the Institute for Supply Management.
Imports Index remained in contraction for the seventh month in October after expanding for three straight months. The October figure of 45.4% is an increase of 0.7 pp compared to the reading of 44.7 % reported in September. Only one industry reported higher imports for the month.
The Inventories Index registered 45.8% in October, down 1.9 pp compared to the reading of 447.7% in September. Of 18 manufacturing industries, the fiver reported higher inventories in October.
Read the ISM release.
