September 2022 Manufacturing ISM Report On Business Reports New Orders and Employment Fell Back to Contraction

By Steve Clouther

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 grew in September, with the overall economy achieving a 28th consecutive month of growth, say the Manufacturing ISM Reportnation's supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector grew in September, as the Manufacturing PMI registered 50.9 percent, 1.9 percentage points below the reading of 52.8 percent recorded in August. The Manufacturing PMI continued to indicate sector expansion and U.S. economic growth in September.

ISM’s New Orders Index decreased 4.2 percentage points in September to 47.1 percent compared to 51.3 percent reported in August. This indicates that new order volumes fell back into contraction after one month of expansion.

The Production Index registered 50.6 percent in September, 0.2 percentage point higher than the August reading of 50.4 percent, indicating growth for the 28th consecutive month.

ISM’s Employment Index registered 48.7 percent in September, 5.5 percentage points lower than the August reading of 54.2 percent. The index returned to contraction territory after one month of expansion.

The delivery performance of suppliers to manufacturing organizations was slower in September, as the Supplier Deliveries Index registered 52.4 percent, 2.7 percentage points lower than the 55.1 percent reported in August.

The Inventories Index registered 55.5 percent in September, 2.4 percentage points higher than the 53.1 percent reported for August. Manufacturing inventories expanded at a faster rate compared to August.

ISM’s Backlog of Orders Index registered 50.9 percent in September, a 2.1-percentage point decrease compared to the 53 percent reported in August, indicating order backlogs expanded for the 27th straight month.

Nine manufacturing industries reported growth in September, in the following order: Nonmetallic Mineral Products; Machinery; Plastics & Rubber Products; Miscellaneous Manufacturing; Apparel, Leather & Allied Products; Transportation Equipment; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Electrical Equipment, Appliances & Components. The seven industries reporting contraction in September compared to August, in the following order are: Furniture & Related Products; Textile Mills; Wood Products; Printing & Related Support Activities; Paper Products; Chemical Products; and Fabricated Metal Products.


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