The Institute for Supply Management’s Manufacturing Report On Business Survey. (Photo: REUTERS)
The Institute for Supply Management gauge of national manufacturing activity fell to 50.1 in October from 50.2 in September, marking a 4th straight month of decline.
While the reading was just barely above economists’ expectations of 50, it was the lowest since May 2013. Readings above 50 point to expansion, while those below indicate contraction, where most of the regional gauges have been in October.
“Comments from the panel reflect concern over the high price of the dollar and the continuing low price of oil, mixed with cautious optimism about steady to increasing demand in several industries,” said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
From the Manufacturing ISM Report On Business:
Of the 18 manufacturing industries, seven are reporting growth in October in the following order: Printing & Related Support Activities; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Paper Products; and Fabricated Metal Products. The nine industries reporting contraction in October — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Petroleum & Coal Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; Transportation Equipment; Wood Products; and Computer & Electronic Products.
However, the employment index contracted to 47.6, marking the first time the subindex fell below 50 since April and its lowest level since August 2009. The September jobs report released by the Labor Department last month showed the lowest number of male workers in the labor market ever recorded. Expectations called for a reading of 50.1.
New orders rose to 52.9 from 50.1, while the prices paid subindex was up 1 from 38.0 to 39.0, beating out expectations of 38.0. Still, overall, the U.S. manufacturing sector has been hurting for months, particular regional activity that appears to just now reflect in the national manufacturing sector survey conducted by ISM.
The New York Federal Reserve’s Empire State Manufacturing Survey remained stuck in contraction territory in Oct., declining for a third consecutive month. The Philadelphia Federal Reserve said the Manufacturing Business Outlook Survey showed continued contraction for the second straight month in the mid-Atlantic region, while the Commerce Department said new durable goods orders fell 1.2%.
However, The Chicago Business Barometer, or the Chicago PMI gauge of Midwest manufacturing activity, unexpectedly increased to 56.2, up from 48.7 in September.
| MANUFACTURING AT A GLANCE OCTOBER 2015 |
||||||
|---|---|---|---|---|---|---|
| Index | Series Index Oct |
Series Index Sep |
Percentage Point Change |
Direction | Rate of Change |
Trend* (Months) |
| PMI® | 50.1 | 50.2 | -0.1 | Growing | Slower | 34 |
| New Orders | 52.9 | 50.1 | +2.8 | Growing | Faster | 35 |
| Production | 52.9 | 51.8 | +1.1 | Growing | Faster | 38 |
| Employment | 47.6 | 50.5 | -2.9 | Contracting | From Growing | 1 |
| Supplier Deliveries | 50.4 | 50.2 | +0.2 | Slowing | Faster | 3 |
| Inventories | 46.5 | 48.5 | -2.0 | Contracting | Faster | 4 |
| Customers’ Inventories | 51.0 | 54.5 | -3.5 | Too High | Slower | 3 |
| Prices | 39.0 | 38.0 | +1.0 | Decreasing | Slower | 12 |
| Backlog of Orders | 42.5 | 41.5 | +1.0 | Contracting | Slower | 5 |
| Exports | 47.5 | 46.5 | +1.0 | Contracting | Slower | 5 |
| Imports | 47.0 | 50.5 | -3.5 | Contracting | From Growing | 1 |
| OVERALL ECONOMY | Growing | Slower | 77 | |||
| Manufacturing Sector | Growing | Slower | 34 | |||
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.
