October 2019 Manufacturing ISM Report On Business Shows Manufacturing Continues to Contract

By Steve Clouther

Category:
Industry Trends

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector contracted in October, and the overall economy grew for the 126th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing contracted in October, as the PMI registered 48.3 percent, an increase of 0.5 percentage point from the September reading of 47.8 percent.  The PMI contracted for the third straight month, but at slower levels compared to September.  This marks seven straight months of softening or contraction in manufacturing.

ISM’s New Orders Index registered 49.1 percent in October, an increase of 1.8 percentage points when compared to the 47.3 percent reported for September.  This indicates that new orders contracted for the third straight month, but at a slower rate.

ISM’s Production Index registered 46.2 percent in October, which is 1.1 percentage points lower when compared to the 47.3 percent reported for September, indicating the third consecutive month of contraction.

ISM’s Employment Index registered 47.7 percent in October, an increase of 1.4 percentage points when compared to the September reading of 46.3 percent.  This indicates contraction in October for the third consecutive month, but at a slower rate.

The delivery performance of suppliers to manufacturing organizations was faster in October, as the Supplier Deliveries Index registered 49.5 percent.  This is 1.6 percentage points lower than the 51.1 percent reported for September.

The Inventories Index registered 48.9 percent in October, an increase of 2 percentage points from the 46.9 percent reported for September.  The index contracted for the fifth straight month, but at a slower rate.

ISM’s Backlog of Orders Index registered 44.1 percent in October, which is 1 percentage point lower than the 45.1 percent reported in September, indicating order backlogs contracted for the sixth consecutive month, at a faster rate in October.

Of the 18 manufacturing industries, five reported growth in October: Furniture & Related Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Wood Products; and Computer & Electronic Products.  The 12 industries reporting contraction in October — in the following order — are: Primary Metals; Apparel, Leather & Allied Products; Textile Mills; Transportation Equipment; Plastics & Rubber Products; Machinery; Chemical Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Miscellaneous Manufacturing; and Paper Products.

 

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