U.S. manufacturing expanded faster in October as production reached its strongest reading since November 2021, but purchasing managers continued to report rising prices and slower deliveries, the Institute for Supply Management said in its monthly report released Monday, November 2. The Manufacturing Purchasing Managers’ Index rose to 55.5 from 54.5 in September, marking a tenth consecutive month of expansion.
The production index increased to 59.0 from 56.7, while new orders edged up to 55.5 from 55.3. A reading above 50 signals expansion for those measures. The survey shows the direction and breadth of changes reported by manufacturers, not a percentage change in the volume of output.
The improvement in activity came with persistent cost pressure. The prices index eased to 75.2 from 77.9, meaning prices were still rising, though at a slower rate. It does not mean manufacturers reported falling input prices.
Supplier deliveries also slowed further. That index rose to 59.1 from 59.0; unlike most ISM indexes, a reading above 50 means deliveries are taking longer, not that supplier performance has improved.
Employment remained in expansion territory but grew more slowly, with its index slipping to 52.4 from 52.7. Inventories returned to growth at 51.4, up from 48.6. The backlog-of-orders index eased to 54.6 from 56.4.
Susan Spence, chair of ISM’s Manufacturing Business Survey Committee, said general sentiment worsened for a third consecutive month. Negative comments made up 66% of responses, versus 34% positive. Among the negative comments, 62% mentioned pricing volatility and 41% mentioned longer lead times; respondents could cite more than one issue.
Twelve manufacturing industries reported growth and three reported contraction. The report pairs stronger factory activity with complaints about supply constraints and costs. Those manufacturing survey results do not by themselves establish the pace of growth across the broader economy.
JBizNews Desk | New York
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