Photo: Wikimedia Commons
ISM Manufacturing rose to 51.5 from 49.6 last month, beating economists’ consensus expectations of 49.7.This puts the index back above 50, which indicates expansion in manufacturing activity in September.
The prices paid index rose to 58.0 from 54.0 last month, versus expectations of 55.7.
New orders led the way in the sub-indices, rising to 52.3 from 47.1 last month, with prices paid logging the second-highest month-over-month increase.
More colour on the new orders jump from the Institute for Supply Management:
The eight industries reporting growth in new orders in September — listed in order — are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Furniture & Related Products; Paper Products; Plastics & Rubber Products; Primary Metals; and Fabricated Metal Products. The six industries reporting a decrease in new orders during September — listed in order — are: Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Miscellaneous Manufacturing; and Wood Products.
Of the 18 manufacturing industries, 10 reported paying increased prices during the month of September in the following order: Food, Beverage & Tobacco Products; Plastics & Rubber Products; Printing & Related Support Activities; Wood Products; Chemical Products; Primary Metals; Furniture & Related Products; Machinery; Fabricated Metal Products; and Miscellaneous Manufacturing. The four industries reporting paying lower prices during September are: Paper Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; and Nonmetallic Mineral Products.
Production, backlog of orders, exports, and imports indicators are all still contracting.
Here is a chart from the report breaking down the sub-indices:
And here is what the respondents to the ISM survey are saying (a mix of positive and negative views across sectors):
- “Appears that our so-called ‘slowdown’ was a summer thing. September brings with it increasing requirements and business.” (Paper Products)
- “Business improved through Q3, but is beginning to show signs of slowing down in Q4; this has been a typical trend over the last few years.” (Wood Products)
- “Business has picked up going into the last quarter.” (Plastics & Rubber Products)
- “We are sticking to our manufacturing plan, but have slowed production down considerably. Haven’t added any new units to the 2012 plan, and still have no forecast for 2013 released.” (Computer & Electronic Products)
- “Sales have tanked over the last two months, bringing a very concerned and stressed management team. Not very optimistic for the near-term future.” (Apparel, Leather & Allied Products)
- “Uncertainty in the healthcare legislation (reform) continues to be the underlying force keeping our sales revenue below its full potential.” (Miscellaneous Manufacturing)
- “Steel and aluminium prices still dropping, and auto production orders are up.” (Transportation Equipment)
- “Domestic business is up; international is down.” (Electrical Equipment, Appliances & Components)
- “Demand seems to have stabilised from August. New orders are appearing this month without advanced notice from our customers.” (Chemical Products)