Manufacturing Sector Expands, Though Demand Weakens
Economic activity in the manufacturing sector expanded in September for the 26th consecutive month as the PMI registered 51.6 percent, an increase of 1 percentage point from August, reports the Institute for supply Management, Tempe, Ariz. "We sense a weakening in demand, but it is not extreme at this point," says Bradley J. Holcomb, chairman of ISM’s Manufacturing Survey Committee.
Manufacturing continued its growth in September as the PMI registered 51.6 percent, an increase of 1 percentage point when compared to August's reading of 50.6 percent. A reading above 50 percent indicates expansion.
Of the 18 manufacturing industries surveyed, 12 reported growth in September. Among the six industries reporting contraction were primary metals and fabricated metal products.
ISM's New Orders Index registered 49.6 percent in September, which represents the same rate as in August. This is the third consecutive month of contraction in the New Orders Index, following 24 months of growth. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders.
ISM's Production Index registered 51.2 percent in September, which is an increase of 2.6 percentage points when compared to the August reading of 48.6 percent, and a return to growth following one month of contraction. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.
ISM's Employment Index registered 53.8 percent in September, which is 2 percentage points higher than the 51.8 percent reported in August. An Employment Index above 50.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics data on manufacturing employment.
The Inventories Index registered 52 percent in September, 0.3 percentage point lower than the 52.3 percent reported in August. An Inventories Index greater than 42.7 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' figures on overall manufacturing inventories. Among industries reporting inventory decreases in September were fabricated metal products and primary metals.