Manufacturing activity contracted for the 11th consecutive month in September, but production ticked up and employment began to rebound, according to the ISM® Manufacturing Purchasing Managers’ Index®.
What’s going on: The manufacturing activity index increased for the third month in a row in September, to 49.0 from August’s 47.6.
- While a reading below 50 still indicates contraction, September’s number is the highest in more than a year.
Digging deeper: Production rose to 52.5 from 50.0, the strongest showing since July 2022. Hiring rose to 51.2 from 48.5, a rebound after three straight months of decreases.
- Meanwhile, the readings for new orders (up to 49.2 from 46.8) and exports (up to 47.4 from 46.5) also improved in September.
- Prices for raw materials dropped to 43.8 from 48.4, reflecting weaknesses globally.
Lead times and inventories: Lead times decreased to 46.4 from 48.6, and inventories rose to 45.8 from 44.0, “consistent with manufacturers working through their existing stockpiles,” NAM Chief Economist Chad Moutray said.