Input Stories

The S&P Global Manufacturing PMI was 52.5 in October, up slightly from the September reading of 52.0. New orders saw their strongest gain in 20 months, although the gain was concentrated domestically. Exports declined for the fourth consecutive month as tariffs impacted sales to key markets, namely Canada, China and Mexico. Meanwhile, higher prices on inputs led to a faster pace of increase in output prices than in September. Although inflation remains elevated in a historical context, inflation was at its lowest level since February.

Production rose over the month, allowing stocks of finished goods to rise for the third consecutive month and at the quickest rate of increase in the 18 years of the survey’s history. If demand and export sales remain weak, this unprecedented rise in unsold stock could result in a decline in output in future months. Meanwhile, delivery times continued to worsen as a result of transportation delays and import challenges from tariffs.

Uncertainty around tariffs continued to weigh on business confidence, with overall business expectations dropping to the lowest level since April. Despite the uncertainty, investment is expected to help boost production over the next year. Uncertainty and excess capacity for manufacturers contributed to limited hiring. Nonetheless, employment rose modestly for a third consecutive month in October.