Manufacturing accelerated at its fastest rate in 13 years in September, fueled by new orders, production and job growth, the Institute for Supply Management (Tempe, AZ) said today.
The group’s manufacturing index, known as the PMI, was 60.8%, according to a monthly report. That was the index’s best since May 2004. The PMI advanced from 58.8% in August.
Going into September, there was uncertainty related to Hurricane Harvey, which hit energy-producing regions of Texas on Aug. 25 and stalled over the state for days. The storm caused catastrophic flooding in the region.
Another hurricane, Irma, also struck Florida and the southeastern U.S. last month. But officials with the group said manufacturing growth occurred anyway.
Manufacturing had “strong growth in spite of weather impacts,” said Timothy R. Fiore, chair of the institute’s Manufacturing Business Survey Committee.
ISM said 17 of 18 industries reported economic expansion. Among them were machinery, transportation equipment, fabricated metal products, miscellaneous manufacturing and petroleum and coal products. The only industry reporting economic contraction was furniture.
The ISM report is based on a survey of 350 purchasing and supply executives. A reading above 50% indicates expansion and below 50% contraction. The PMI has averaged 56.2% the past 12 months and 57.1% for the first nine months of 2017. The index last indicated economic contraction in August 2016.
The institute’s New Orders Index surged to 64.6% in September from 60.3% the month before. Fourteen of 18 industries reported increases in new orders. Only three sectors, including furniture and textiles, reported a decline in orders.
ISM’s Production Index advanced to 62.2% from 61% in August. Thirteen reported output increases. Two industries, furniture and petroleum and coal products, reported a decline.
The group’s Employment Index rose to 60.3% in September from 59.9% in August. Thirteen industries reported employment gains. Three, including chemical products, reported job cuts.
Manufacturing should continue to be strong, Fiore said.
“We’re 19 months into an expansion cycle that typically runs 30 months,” he said. “Order books are strong.”