The 2020 Mid-Year Economic Update_long

Manufacturing Sector Expansion Slows in September

PMI down slightly from August, but the sector continues to grow

The manufacturing sector expanded in September – albeit at a slower rate than the previous month – according to supply executives in the latest Manufacturing ISM Report on Business. The September PMI was 56.6 percent, 2.4 percentage points lower than August's 59 percent.

The New Orders Index registered 60 percent, a decrease of 6.7 percentage points from August. The Production Index registered 64.6 percent, 0.1 percentage points above August.

The Employment Index of 54.6 percent decreased 3.5 percent from August's 58.1 percent though still indicated expansion. Inventories of raw materials registered 51.5 percent, down 0.5 percentage points from the August reading of 52 percent.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

"Comments from the panel reflect a generally positive business outlook, while noting some labor shortages and continuing concern over geopolitical unrest," said Bradley Holcomb, chairman of the Institute for Supply Management Manufacturing Business Survey committee.

Of the 18 manufacturing industries, 15 are reporting growth in September in the following order: Wood Products; Primary Metals; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Furniture & Related Products; Fabricated Metal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Computer & Electronic Products; Paper Products; Chemical Products; Transportation Equipment; Petroleum & Coal Products; and Textile Mills.

The three industries reporting contraction in September are: Machinery; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components.

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