Manufacturing remained operating at strong levels in September while coping with significant challenges, the Institute for Supply Management said today.
The Tempe, Ariz.-based group’s manufacturing index, known as the PMI, reached 61.1 percent last month, up from 59.9 percent in August. A PMI above 50 percent indicates economic expansion. Below 50 percent shows contraction.
The PMI is based on a survey of supply executives in 18 industries. Seventeen industries reported economic growth last month, with only wood products indicating contraction.
At the same time, survey results indicated manufacturers continue to deal with labor shortages as well as high raw materials prices.
The PMI “is a happy days number,” Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, said on a conference call.
Still, labor and raw materials issues are headwinds for manufacturing, he said. Also, some shipments are taking longer to complete.
Respondents “say they’ve never seen anything like this before,” Fiore added. “We’re out of balance.”
There were additional problems because Hurricane Ida, which made landfall in the U.S. in late August, disrupted the petrochemical industry.
The PMI is considered a leading economic indicator and a barometer of where manufacturing is headed. The index has been in positive territory for the 16 consecutive months. It has averaged 60.4 percent the past 12 months.
ISM’s New Orders Index was 66.7 percent in September, unchanged from August. Of the 18 industries, 13 reported an increase in new orders. Only two industries reported a decline in orders.
The group’s Production Index slipped to 59.4 percent last month, down from 60 in August. Fourteen industries reported a gain in production. Two industries said production decreased.
The institute’s Employment Index edged into positive territory in September at 50.2 percent, up from 49 percent in August.
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