U.S. manufacturing PMI climbs to 49.1 as contraction breaks half-year mark
The U.S. manufacturing sector contracted for a seventh straight month as of the latest Manufacturing PMI Report from the Institute for Supply Management for September. The measure of U.S. manufacturing growth rose less than half a percentage point but landed at 49.1 percent, indicating a slow decline.
Production growth drove the 0.4 point growth from August’s 48.7 rating to September’s rating of 49.1, according to the ISM’s analysis, as the component production index increased by 3.2 points to 51.0 percent. The otherwise positive sign was brought down by low demand, as the new orders index entered contraction territory (48.9%) after growing in August (51.4 percent).
Mirroring the main manufacturing index, the manufacturing employment index continued to show falling employment, but at a slower rate: That index increased 1.5 points to 45.3 percent from August to September, but remained in shrinkage territory for an eighth month.
Respondents to the ISM’s survey reported ongoing damage from tariffs, inflation, and consistently depressed orders. The ISM noted that prices for 12 commodities increased in September, while prices for only two (polypropylene resin and steel) fell. The price of aluminum increased for a twenty-second month running.
What people are saying
“In September, U.S. manufacturing activity contracted at a slightly slower rate, with production growth the biggest factor in the 0.4-percentage point gain of the Manufacturing PMI. However, the combined drops in the New Orders and Inventories indexes (4.2 percentage points) exceeded the increase in the Production Index (3.2), rendering the Manufacturing PMI improvement negligible,” wrote Susan Spence, Chair of the ISM’s Manufacturing Business Survey Committee, in analysis accompanying the report. “Last month’s increase in new orders (an index gain of 4.3 percentage points from July to August) seems to have flowed through to production but does not appear to be sustainable given the subsequent drop in new orders in September.”