ISM manufacturing PMI rose to 55.5 in October as panel sentiment soured
The Institute for Supply Management's manufacturing PMI rose to 55.5 in October from 54.5 in September, with production at its highest since November 2021, even as two thirds of survey comments were negative.
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US factory activity grew faster in October. The Institute for Supply Management's Manufacturing PMI rose 1 point to 55.5, from 54.5 in September, the ISM said on Monday, 2 November. It was the 10th straight month above 50, the line between expansion and contraction, and it came in above the 54.5 consensus estimate, investingLive reported.
The mood among the people filling in the survey was weaker than the numbers. "U.S. manufacturing keeps expanding, but the mood among those overseeing supply chains activity is another story," the ISM wrote in a post on X after the release. In the report, ISM survey chair Susan Spence said general sentiment worsened for a third month, with 34 percent of comments positive and 66 percent negative. Pricing volatility came up in 62 percent of the negative comments, longer lead times in 41 percent, tariffs in 25 percent and the Iran war in 21 percent.
The Production Index rose 2.3 points to 59.0, its highest reading since November 2021, and the New Orders Index edged up 0.2 points to 55.5, according to the ISM. The Employment Index slipped 0.3 points to 52.4, a fourth month of expansion, and the Inventories Index returned to growth at 51.4. All five indexes that make up the PMI were above 50, one more than in September.
Costs stayed high. The Prices Index fell 2.7 points to 75.2 but showed rising raw material prices for a 25th straight month, and Spence linked it to steel and aluminum prices, tariffs and petroleum based products affected by the Middle East conflict. Aluminum, copper, steel, semiconductors and memory components were among the items reported up in price. Twelve of 18 industries reported growth, led by plastics and rubber products, electrical equipment and machinery, while printing, paper products and nonmetallic mineral products contracted.
The ISM said the October reading corresponds to a 2.7 percent annualized increase in real GDP, based on the past relationship between the index and the economy. The next report, covering November, is due at 10 a.m. Eastern on Tuesday, 1 December. The PMI is a survey of purchasing and supply executives, not a direct measure of output. This article is not investment advice.
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