Manufacturing ISM Report on Business Indicates Growth In New Orders for the 17th Consecutive Month

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected. Economic activity in the manufacturing sector expanded in October for the 17th consecutive month, and the overall economy grew for the 65th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in October as the PMI registered 59 percent, an increase of 2.4 percentage points when compared to September's reading of 56.6 percent. This is the same reading as reported in August 2014, which is the highest reading for the index since March of 2011 when it registered 59.1 percent.

ISM's New Orders Index registered 65.8 percent in October, an increase of 5.8 percentage points when compared to the 60 percent reported in September, indicating growth in new orders for the 17th consecutive month.

ISM's Production Index registered 64.8 percent in October, which is an increase of 0.2 percentage point when compared to the 64.6 percent reported in September, indicating growth in production for the eighth consecutive month.

ISM's Employment Index registered 55.5 percent in October, which is an increase of 0.9 percentage point when compared to the 54.6 percent reported in September. This is the 16th consecutive month of growth in employment.

The delivery performance of suppliers to manufacturing organizations slowed in October at a faster rate relative to September as the Supplier Deliveries Index registered 56.2 percent. This month's reading is 4 percentage points higher than the 52.2 percent reported in September.

The Inventories Index registered 52.5 percent in October, which is 1 percentage point higher than the 51.5 percent registered in September, indicating raw materials inventories are growing for the third consecutive month.

ISM's Backlog of Orders Index registered 53 percent in October, which is 6 percentage points higher than the 47 percent reported in September, indicating growth in order backlogs following one month of contraction. Of the 88 percent of respondents who reported their backlog of orders, 24 percent reported greater backlogs, 18 percent reported smaller backlogs, and 58 percent reported no change from September.

Of the 18 manufacturing industries, 16 are reporting growth in October in the following order: Plastics & Rubber Products; Textile Mills; Fabricated Metal Products; Miscellaneous Manufacturing; Primary Metals; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Chemical Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Transportation Equipment; Furniture & Related Products; Paper Products; Machinery; and Computer & Electronic Products. The only industry reporting contraction in October is Petroleum & Coal Products.

Keywords: Automation, Manufacturing, Process Industries, Discrete Industries, Supply Management, PMI, ISM, ARC Advisory Group.