October 2022 Manufacturing ISM Report On Business Indicates Order Backlogs Contracted After A 27-Month Period of Expansion

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 grew in October, with the overall economy achieving a 29th consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector grew in October, as the Manufacturing PMI registered 50.2 percent, 0.7 percentage point below the reading of 50.9 percent recorded in September.

ISM’s New Orders Index contracted for the second consecutive month in October, registering 49.2 percent, an increase of 2.1 percentage points compared to the 47.1 percent reported in September.

The Production Index registered 52.3 percent in October, 1.7 percentage points higher than the September reading of 50.6 percent, indicating growth for the 29th consecutive month.

ISM’s Employment Index registered 50 percent in October, 1.3 percentage points higher than the September reading of 48.7 percent, indicating employment was unchanged after contracting for one month.

The delivery performance of suppliers to manufacturing organizations was faster in October, as the Supplier Deliveries Index registered 46.8 percent, 5.6 percentage points lower than the 52.4 percent reported in September and the first time in “faster” territory since February 2016 (49.6 percent).

The Inventories Index registered 52.5 percent in October, 3 percentage points lower than the 55.5 percent reported for September, indicating that manufacturing inventories expanded at a slower rate compared to September.

ISM’s Backlog of Orders Index registered 45.3 percent in October, a 5.6-percentage point decrease compared to September’s reading of 50.9 percent, indicating order backlogs contracted after a 27-month period of expansion.

Eight manufacturing industries reported growth in October, in the following order: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Machinery; Petroleum & Coal Products; Transportation Equipment; Miscellaneous Manufacturing; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components. The 10 industries reporting contraction in October compared to September, in the following order are: Furniture & Related Products; Wood Products; Paper Products; Textile Mills; Printing & Related Support Activities; Fabricated Metal Products; Chemical Products; Primary Metals; Computer & Electronic Products; and Food, Beverage & Tobacco Products.