Manufacturing Sees Moderate, Mixed Growth In September

Institute for Supply Management report suggests sector is doing well overall, despite a slip in new orders and production.

TEMPE, Ariz. — Activity in the manufacturing sector expanded in September, according to a report from the Institute for Supply Management (ISM).
“Manufacturing growth continued in September while some sectors of the economy are apparently struggling. The trend is toward slower growth in manufacturing as the rate of growth in both the New Orders Index and Production Index slowed,” said Norbert J. Ore, chair of the ISM Manufacturing Business Survey Committee. “Overall, September looks like a good month for manufacturing.”
For September, the PMI dipped 0.9 percent to 52.9 percent. A reading above 50 indicates that the manufacturing economy is generally expanding.
New orders fell 1.9 points to 53.4. Production decreased 1.5 points to 54.6.
Employment increased 0.4 percent to 51.7. Supplier delivery times also increased, up 1.9 points to 51.9, signaling slower supplier deliveries.
Inventories decreased 3.8 points to 41.6, marking the 14th month of inventory liquidation and the lowest reading since January.
At 59 percent, the Prices Index shows manufacturers are paying higher prices when compared to August.  
Backlog of orders was at 51 percent, 0.5 percent higher than August.
Export orders slipped 2.5 points to 54.5 as imports rose 0.5 percent to 53.
“The September report from the Institute for Supply Management (ISM) is consistent with recent data releases indicating moderate and mixed growth in manufacturing,” said Thomas J. Duesterberg, President and Chief Executive Officer of the Manufacturers Alliance/MAPI.  “Exports of price-sensitive goods, such as chemicals and electrical equipment, are helping lead growth, while housing and autos continue to be a drag on growth.  Lower inventories, moderating input costs, and slightly stronger hiring patterns all point to modest growth for the remainder of the year.”
"We saw a weak first quarter and a strong second quarter," added Ore. "The third quarter should be somewhere in the middle and the fourth quarter should hold its own."
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