U.S. manufacturing index positive, but new orders lag

The Institute for Supply Management reports that economic activity in the U.S. manufacturing sector expanded in September for the 14th consecutive month, and the overall economy grew for the 17th consecutive month.

The Institute for Supply Management (ISM, Tempe, Ariz., USA) on Oct. 1 reported that economic activity in the U.S. manufacturing sector expanded in September for the 14th consecutive month, and the overall economy grew for the 17th consecutive month. ISM's Purchasing Managers Index (PMI) registered 54.4 percent, following a August value of 56.3 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. “While the headline number shows relative strength this month as the PMI reading of 54.4 percent is still quite positive, the overall picture is less encouraging. The growth of new orders continued to slow, as the index is down significantly from its cyclical high of 65.9 percent (January 2010). Production is currently growing at a faster rate than new orders, but it typically lags and would be expected to weaken further in the fourth quarter. Manufacturing has enjoyed a stronger recovery than other sectors of the economy, but it appears that weaker growth is the expectation for the fourth quarter. Both the Inventories and Backlog of Orders Indexes are sending strong negative signals of weakening performance in the sector.”

12-month ISM Manufacturing Index history (percent):

  • September 2010: 54.4
  • August 2010: 56.3
  • July 2010: 55.5
  • June 2010: 56.2
  • May 2010: 59.7
  • April 2010: 60.4
  • March 2010: 59.6
  • February 2010: 56.5
  • January 2010: 58.4
  • December 2009: 55.9
  • November 2009: 53.6
  • October 2009: 55.7