October 2023 Manufacturing ISM Report On Business Reports New Orders and Backlogs Contracting

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 contracted in October for the 12th consecutive month following a 28-month period of growth, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector contracted in October, as the Manufacturing PMI registered 46.7 percent, 2.3 percentage points lower than the reading of 49 percent recorded in September. This is the 12th month of contraction.

ISM’s New Orders Index contracted for the 14th consecutive month in October, registering 45.5 percent, a decrease of 3.7 percentage points compared to September’s reading of 49.2 percent.

The Production Index registered 50.4 percent in October, expanding slightly, but 2.1 percentage points lower than the September reading of 52.5 percent. This follows one month of “unchanged” status (a reading of 50 percent) preceded by two months of contraction, one month of expansion, and five months of contraction before that.

ISM’s Employment Index registered 46.8 percent in October, 4.4 percentage points lower than the September reading of 51.2 percent. The index indicated employment contracted in October after one month of expansion and three months of contraction before that.

The delivery performance of suppliers to manufacturing organizations improved for the 13th straight month in October, as the Supplier Deliveries Index registered 47.7 percent, 1.3 percentage points higher than the 46.4 percent reported in September.

The Inventories Index registered 43.3 percent in October, 2.5 percentage points lower than the 45.8 percent reported in September. Manufacturing inventories contracted at a faster rate compared to the previous month.

ISM’s Backlog of Orders Index registered 42.2 percent, a 0.2-percentage point decrease compared to September’s reading of 42.4 percent, indicating order backlogs contracted for the 13th consecutive month (and at a faster rate in October) after a 27-month period of expansion.

The two manufacturing industries that reported growth in October are: Food, Beverage & Tobacco Products; and Plastics & Rubber Products. The 13 industries reporting contraction in October — in the following order — are: Printing & Related Support Activities; Textile Mills; Electrical Equipment, Appliances & Components; Machinery; Fabricated Metal Products; Wood Products; Computer & Electronic Products; Furniture & Related Products; Paper Products; Miscellaneous Manufacturing; Primary Metals; Chemical Products; and Transportation Equipment.