September saw an increase in manufacturing activity, according to the ISM® Manufacturing Purchasing Managers’ Index®. NAM Chief Economist Chad Moutray broke it down for us.
The headline: “Manufacturing activity expanded just slightly, with [the index] dropping from 52.8 in August to 50.9 in September, the lowest reading since May 2020,” said Moutray. (Numbers above 50 indicate an expansion.)
The data: According to Moutray, the underlying data were “mixed but weak overall.”
- New orders fall: “New orders (down from 51.3 to 47.1) contracted for the third time in the past four months, with hiring (down from 54.2 to 48.7) and exports (down from 49.4 to 47.8) also challenged once again.”
- Production rises: “Production (up from 50.4 to 50.6) and inventories (up from 53.1 to 55.5) strengthened for the month.”
- Prices slow: “More importantly, prices (down from 52.5 to 51.7) decelerated once again in September, with that reading growing at the slowest pace since June 2020.”
- Wait times abate: “The index for supplier deliveries (down from 55.1 to 52.4) registered its best reading since December 2019, which indicates that the long wait times that have become prevalent over the past year have started to wane. Nonetheless, customer inventories (up from 38.9 to 41.6) remained too low, albeit with notable improvement.
The big picture: “Overall, manufacturing activity expanded once again in September, but only slightly and with sentiment remaining at post-pandemic lows, consistent with other surveys (including the NAM Manufacturers’ Outlook Survey),” said Moutray.