October Manufacturing ISM Report On Business: PMI at 56.8%
Press release from the issuing company
(Tempe, Arizona) — Economic activity in the manufacturing sector grew in October for the 17th consecutive month, while the overall economy grew for the 36th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.
The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation. "Strong growth continues in the sector, but at a slower rate than in September. New orders and production remain strong, and employment continues to expand. However, energy prices and commodity price inflation are major concerns for manufacturing buyers."
The ISM Prices Index still indicates that there is significant upward pressure on prices. ISM's Customers' Inventories Index indicates that customer inventories are too low at this time. The Backlog of Orders Index indicates that order backlogs decreased in October. The New Export Orders and Imports Indexes continued to grow in October.
Comments from respondents this month were typified by responses from the chemical industry indicating that demand for members' products is strong, but profitability is being squeezed by energy prices. The electronics industry appears to be slowing as several respondents indicated a slowing in new orders.
ISM's PMI registered 56.8 percent in October, a decrease of 1.7 percentage points when compared to 58.5 percent in September. ISM's New Orders Index rose 0.2 percentage point from 58.1 percent in September to 58.3 percent in October. ISM's Production Index decreased 2.7 percentage points from 61.6 percent in September to 58.9 percent in October. The ISM Employment Index is at 54.8 percent for October, a decrease of 3.3 percentage points when compared to the 58.1 percent reported in September.
ISM's Supplier Deliveries Index registered 58.6 percent, 1 percentage point lower than September's 59.6 percent. ISM's Inventories Index registered 48.2 percent in October, down from the 51 percent reported in September. ISM's Customers' Inventories Index for October is at 43.5 percent, an increase of 2 percentage points compared to the September reading of 41.5 percent. ISM's Prices Index in October is 78.5 percent, 2.5 percentage points higher than the 76 percent reported in September.
ISM's Backlog of Orders Index for October declined 6 percentage points to 49 percent from 55 percent registered in September. ISM's New Export Orders Index registered 56.6 percent, a decrease of 4.8 percentage points from September's 51.8 percent. ISM's Imports Index increased 2.7 percentage points to 58.5 percent in October, up from 55.8 percent in September.
"October continued a trend of slower growth, but that should be somewhat expected as manufacturing has experienced three quarters of strong growth so far this year. The decline in order backlogs is an indication that manufacturing has peaked, and some sectors are seeing this more than others. Concerns over recent inventory growth would seem to be offset by October's decline in inventories and the expectations that customer inventories are still too low," said Ore.
In October, 15 industries reported growth: Miscellaneous*; Food; Wood & Wood Products; Industrial & Commercial Equipment & Computers; Apparel; Instruments & Photographic Equipment; Paper; Printing & Publishing; Furniture; Chemicals; Rubber & Plastic Products; Electronic Components & Equipment; Transportation & Equipment; Glass, Stone & Aggregate; and Textiles.
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