The U.S. manufacturing economy grew in September, for the 40th straight month, though at a slower pace than in August, according to the Institute for Supply Management’s latest Manufacturing Report on Business, released this morning.
The overall U.S. economy grew last month for the 59th consecutive month, the trade group said.
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The institute’s PMI registered 52.9 percent, down 1.6 percentage points from August’s 54.9 percent. That indicates the overall economy and the manufacturing sector both continued to grow, but at a reduced pace, the instutute said.
(Any PMI reading above 50 percent indicates the manufacturing economy is growing; readings of less than 50 percent indicate it is generally contracting; a PMI of greater than 42 percent generally indicates expansion in the overall economy.)
“The past relationship between the PMI and the overall economy indicates that the average PMI for January through September (54.9 percent) corresponds to a 4.4 percent increase in gross domestic product (GDP),” the ISM report said. “In addition, if the PMI for September (52.9 percent) is annualized, it corresponds to a 3.7 percent increase in the real GDP annually”
Industries showing growth in the ISM’s September survey (in order) were: Petroleum and coal products; apparel leather and allied products; miscellaneous manufacturing; computers and electronics; primary metals; furniture and related products; nonmetallic mineral products; paper products; chemical products; transportation equipment; food, beverage and tobacco products; and plastic and rubber products.
Commodities reported in short supply were: electronic components, methanol, and stainless steel>
The ISM’s New Orders Index for September came in at 54.2 percent, the same as August’s, exceeding 50 percent for the 41st consecutive month. (A New Orders Index above 51.1 percent is “generally consistent with an increase in the Census Bureau’s series on manufacturing orders,” the report said.)
The Production Index was 56.1 percent in September, down 0.5 percentage points from August, also making its 41st straight month of growth. (An index above 50 percent generally correlates with a rise in the Federal Reserve Board’s figures for industrial production, the group said.)
The Employment Index registered 49.4 percent last month, down 4.6 percentage points from August’s 54-percent reading, and reversing two months of growth. (An index above 48.9 percent usually correlates with a rise in the U.S. Bureau of Labor Statistics’ data on manufacturing employment, the ISM said.)
The index of manufacturers’ inventories also shrank in September after two months of growth, to 46.4 percent, down 3.8 percentage points from August’s 50.2 percent. (An index greater than 42.2 percent generally indicates expansion.)
The customers’ inventories index rose 3 percentage points, to 49 percent from August’s 46 percent, but still indicated (for the 64th consecutive month) that manufacturers believe their customers do not have sufficient stock on hand.
The trade group’s full report is available at www.ism.ws.
