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ISM: Manufacturing Report On Business Posts Weakest Growth in 2 Years

The Institute for Supply Management’s Manufacturing Report On Business Survey. (Photo: REUTERS)

The Institute for Supply Management’s Manufacturing Report On Business Survey released Thursday for September slowed to its lowest level since May 2013. The gauge of national factory activity fell to 50.2 from 51.1 the month before. The reading was shy of the expected 50.6, according to a Reuters poll of economists.

A reading above 50 indicates expansion in the manufacturing sector.

The new orders subindex fell to 50.1 in September, down from the reading of 51.7 in August and the lowest level since Nov. 2012. The prices paid index fell to 38.0 from 39.0 to mark the weakest level since February, missing expectations for 39.3.

The employment index slipped to 50.5 from 51.2 to remain at its lowest level since April, while the imports index slipped to 50.5 from 51.5 to remain at its lowest level since Jan. 2013.

The Institute for Supply Management’s Manufacturing Report On Business Survey is the latest in a string of disappointing manufacturing data released for the month of September.

The Chicago Business Barometer, the Institute for Supply Management-Chicago’s gauge of Midwest manufacturing activity, fell to 48.7 in September from 54.4 the month prior. Economists polled by Reuter expected a decline only to 53 for the month, still above contraction. The Commerce Department reported on Thursday last week that new orders for long-lasting manufactured durable goods fell 2% in August. The durable goods report came after two closely-watched surveys of regional manufacturing activity indicated contraction last month.

The Philadelphia Federal Reserve’s regional Manufacturing Business Outlook Survey for the mid-Atlantictankedto -6 in September from 8.3 the month prior. The Fed’s reading came in far below economists’ expectations for a drop to positive 6. The Philadelphia Fed’s report marked the second major regional manufacturing survey released this week showing the sector contracting, as the Empire State Manufacturing Survey out last Wednesday showed regional manufacturing activity contracted for a second straight month in September, remaining well below zero at -14.7. Steep declines were reported for both orders and shipments, with the new orders index tanking to -12.9 and the shipments index falling -8.0, respectively.

Meanwhile, of the 18 manufacturing industries, 7 are reporting growth in September in the following order: Printing & Related Support Activities; Textile Mills; Furniture & Related Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Paper Products; and Nonmetallic Mineral Products. The 11 industries reporting contraction in September — listed in order — are: Primary Metals; Apparel, Leather & Allied Products; Petroleum & Coal Products; Wood Products; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; Fabricated Metal Products; Plastics & Rubber Products; Transportation Equipment; and Chemical Products.

MANUFACTURING AT A GLANCE SEPTEMBER 2015
Index	Series Index Sep	Series Index Aug	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI^®	50.2	51.1	-0.9	Growing	Slower	33
New Orders	50.1	51.7	-1.6	Growing	Slower	34
Production	51.8	53.6	-1.8	Growing	Slower	37
Employment	50.5	51.2	-0.7	Growing	Slower	5
Supplier Deliveries	50.2	50.7	-0.5	Slowing	Slower	2
Inventories	48.5	48.5	0	Contracting	Same	3
Customers’ Inventories	54.5	53.0	+1.5	Too High	Faster	2
Prices	38.0	39.0	-1.0	Decreasing	Faster	11
Backlog of Orders	41.5	46.5	-5.0	Contracting	Faster	4
Exports	46.5	46.5	0	Contracting	Same	4
Imports	50.5	51.5	-1.0	Growing	Slower	32
OVERALL ECONOMY				Growing	Slower	76
Manufacturing Sector				Growing	Slower	33

Manufacturing ISM^® Report On Business^® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.

*Number of months moving in current direction.

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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.