The manufacturing sector expanded in October, according to supply executives in the latest Manufacturing ISM Report on Business. The October PMI was 50.1 percent, a decrease of 0.1 percentage points from the September reading.
The New Orders Index registered 52.9 percent, an increase of 2.8 percentage points from the reading of 50.1 percent in September. The Production Index registered 52.9 percent, 1.1 percentage points above the September reading of 51.8 percent. The Employment Index registered 47.6 percent, 2.9 percentage points below the September reading of 50.5 percent.
A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
Of the 18 manufacturing industries, seven are reporting growth in October in the following order: Printing & Related Support Activities; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Paper Products; and Fabricated Metal Products. The nine industries reporting contraction in October — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Petroleum & Coal Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; Transportation Equipment; Wood Products; and Computer & Electronic Products.
“With the dividing line between growth and decline at 50 percent, the reports indicate that manufacturing activity is almost at a standstill, neither rising or falling," said Daniel Meckstroth, chief economist for the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation. "Only 26 percent of the time in the last 25 years has the index been at or less than 50.1 percent, so activity is abnormally weak. The good news in the report is that orders and production are improving."
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