News

In October, U.S. manufacturing remained in contraction but at the slowest pace in three months. The S&P Global U.S. Manufacturing PMI rose to 48.5 in October from 47.3 in September, remaining below the 50 threshold that indicates a contraction in the sector. This suggests manufacturing conditions continued to deteriorate but to a lesser extent than the previous month.

Output and new orders fell at slower rates in October, with political uncertainty cited as the key reason for the drop in new orders. Despite new orders continuing to fall, manufacturers scaled back production to the smallest degree in three months. However, manufacturers continued to reduce employment and purchasing activity.

New export orders also declined slightly but to a much lesser degree than total new business, as demand weakness was notable in Europe. Weaker sales led manufacturers to reduce output for the third consecutive month. While respondents’ optimism about future business conditions strengthened, the current demand slump has resulted in firms continuing to lower their employment levels and purchasing activity as we enter the final quarter of the year.

The pace of inflation eased slightly, with input costs increasing at the slowest pace in almost a year and output price inflation also easing. Where input prices increased, respondents reported higher costs for freight and raw materials, such as cardboard, metals and packaging.