Manufacturing in October continued operating at a strong rate while new orders – which fuel future growth – cooled somewhat, the Institute for Supply Management said today.
The Tempe, Ariz.-based group said its manufacturing index, known as the PMI, was 60.8 percent last month. That was down slightly from September’s PMI of 61.1 percent.
“The manufacturing economy continues to be improving,” Timothy R. Fiore, chair of the organization’s Manufacturing Business Survey Committee, said on a conference call.
The expansion, however, continues to be held back, Fiore said. New orders for products are “up against extended lead times and prices,” he said.
“It’s another really interesting month,” Fiore added. “There are clearly changes happening.”
The PMI is considered a leading economic indicator and a sign of where the manufacturing economy is heading. The index is based on a survey of supply executives across 18 industries.
A PMI level above 50 percent indicates manufacturing expansion. Below that mark shows economic contraction.
The PMI has been above 50 percent for 17 months. In October, 16 industries indicated expansion. The two industries signaling contraction were wood products and non-metallic mineral products.
The index has averaged 60.5 percent in the past 12 months.
ISM’s New Orders Index reached 59.8 percent in October. That’s still a high level but down from 66.7 percent the previous two months. The institute said 14 of 18 industries indicated a gain in new orders. Two industries reported a decline in orders, including non-metallic mineral products.
The group’s Production Index slipped to 59.3 percent in October, down from 59.4 percent in September. ISM said 10 industries reported a gain in output while four indicated a decline in production.
ISM’s Employment Index improved to 52 percent last month from 50.2 percent in September. The institute said 11 industries reported a gain in employment while six reported job cuts.
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