The US manufacturing sector recovers in September with an acceleration in production, according to the ISM

The US industrial sector took another step towards recovery in September, with output rising and employment picking up, according to a survey released on Monday, which also showed that input prices paid by factories have risen. decreased considerably.

The Institute for Supply Management (ISM) said on Monday that its manufacturing purchasing managers’ index (PMI) rose to 49.0 last month, the highest reading since November 2022, from 47.6 in August.

However, September marked the 11th consecutive month that the PMI remained below 50, indicating a contraction in the industrial sector. This is the longest period of contraction since the Great Recession of 2007-2009.

Economists polled by Reuters expected the index to rise to 47.7. While PMI and other business surveys have painted a bleak picture of the manufacturing sector, which accounts for 11.1% of the U.S. economy, other data suggests the sector continues to hold up amid higher borrowing costs.

Orders for long-lasting manufactured goods rose 4.2% year-on-year in August and business spending on equipment appears to have remained strong in the third quarter after rebounding in the April-June period.

The ISM survey’s forecast new orders sub-index increased from 46.8 in August to 49.2 last month. As the volume of new orders improved, production in factories accelerated. The production index increased from 50.0 in the previous month to 52.5.

While backorders have declined, inventories at factories and their customers have remained very low, which should support future production. With demand still weak, input prices remained low.

The measure of prices paid by producers fell from 48.4 in August to 43.8. This bodes well for commodity deflation, but the auto workers’ strike could raise motor vehicle prices.

Industrial employment improved further after hitting a three-year low in July. The factory employment indicator rose to 51.2 last month from 48.5 in August.

Source: Terra

Rose

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