U.S. ISM Manufacturing Index Eases in October
by:Tom Moeller
|in:Economy in Brief
Summary
- Index down sharply from March high.
- Production & inventories indexes lead decline, orders & employment rise.
- Prices reading improves.
The ISM Purchasing Managers Index of activity in the manufacturing sector slipped to 46.5 during October from 47.2 in September. It was the lowest level since July of last year and below the break-even level of 50.3 reached in March. A level of 47.6 in October had been expected by the Action Economics Forecast Survey.
Performance of the component indexes was mixed last month. The production index declined to 46.2 after rising to a four-month high of 49.8 in September. Seventeen percent of respondents reported higher production while 23.9% reported it lower. The inventories reading eased to 42.6 from 43.9, both readings down sharply from a high of 50.3 in August. The supplier delivery index slipped to 52.0 from 52.2, after hitting a high of 52.6 in July. Working higher, the new orders index rose to 47.1 from 46.1 in September. Twenty percent of respondents had increased orders but 29% realized declines. The employment reading rose to 44.4 from 43.9 in October, but it remained down from a high of 51.1 in May.
The prices index, which is not part of the composite series, rose to 54.8 (NSA) from 48.3 in September. An increased 19.8% of respondents reported higher prices last month while a lessened 10.3% reported lower prices.
In other series, export orders fell to a little-changed 45.5, down from a March high of 51.6. The imports index remained at 48.3, also off a March of 53.0 while order the order backlog index declined to 42.3, a three-month low.
The ISM figures are based on responses from over 400 purchasing executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These indexes are diffusion indexes where a reading above 50 indicates expansion and a reading below 50 points to contraction. The figures from the Institute for Supply Management can be found in Haver’s USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver’s AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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