According to the Institute for Supply Management (ISM), U.S. manufacturing rose again in October for the fifth consecutive month, while the overall economy posted its 53rd consecutive month of growth.
According to ISM’s Report on Business, the PMI, issued monthly by the organization, increased to 56.4 percent in October, its highest level this year and a 0.2 percentage point gain from September. The new orders index was up 0.1 percentage point to 60.6 percent, while the production index fell 1.8 points to 60.8 percent.
Despite the slight acceleration in new orders and the slowdown in production, ISM notes that both indexes have been above 60 percent for three consecutive months and are still growing, although production is advancing more slowly than new orders.
The average PMI from January through October is 53.3 percent, which ISM says equates to a 3.5 percent annualized increase in real GDP.
Manufacturing employment was problematic last month. After a 2.1-point increase in September to 55.4, the index slowed by 2.2 points in October to 53.2, falling below August (by 0.1 point) and July (by 1.2 points). Technically, employment is expanding, since the index is above 50 percent, but it is slight.
In related areas, the supplier deliveries index showed slower performance in October versus September, with the index at 54.7, a 2.1-point increase. (Readings over 50 percent for this index mean slower deliveries, while ratings below 50 represent faster performance.)
Manufacturers’ inventories rose in October by 2.5 points to 52.5. Customers’ inventories, meanwhile, were at a 47 percent index rating last month, a 4-point jump from September. ISM says the figures indicate that customer inventories remain low despite the increase, which is, perhaps, a sign that companies are wary of investing too heavily in this area.
The prices index, which tracks raw materials, dropped 1 point in October to 55.5, which still represents a third consecutive month of growth. Order backlogs grew 2 points to 51.5 percent, the first time since April that the index has expanded.
Exports accelerated, up 5 points in October to 57 percent, the highest since April 2012. Imports grew as well, but only by 0.5 points to 55.5 index rating, a “slightly faster rate” than in September, ISM advises, and the 11th straight month of being at or above 50 percent.
Generally, most manufacturers surveyed by ISM posted promising results in October even with the federal government shutdown.