Economic Watch: Manufacturing Surges, Construction Rebounds
Manufacturing activity in the U.S. turned higher in September, hitting its highest level in 13 years, according to newly released survey results of supply executives. A separate report showed construction spending rebounded after two straight monthly drops.
The Institute for Supply Management’s index of manufacturing activity registered 60.8% for September, an increase of two percentage points from the August reading. That’s its highest level since January 2004, with 17 of 18 manufacturing industries reporting growth last month.
A reading over 50% indicates the manufacturing sector is expanding, while below 50% signals contraction. This latest reading was far better than a slight downturn expected in a poll of analysts.
The New Orders Index registered 64.6%, an increase of 4.3 percentage points from the August reading, while the Production Index registered 62.2%, a 1.2 percentage point increase. The Employment Index registered 60.3%, an increase of 0.4 of a percentage point from the August level.
“Order input continues at a strong pace, averaging 61.6% since December 2016, setting the pace for production activity,” said Timothy Fiore, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee. “Production remains at strong growth levels in most industries, in spite of weather conditions and supplier delivery constraints experienced during the period.”
A separate, similar survey from the financial information services provider IHS Markit showed a further improvement in operating conditions across the U.S. manufacturing sector.
Its U.S. Manufacturing Purchasing Managers’ Index registered 53.1 in September, up slightly on the preliminary reading of 53 and rising from 52.8 in August. The upturn signaled a slight pick-up in growth momentum and a strong improvement in overall operating conditions across the sector.
Like the ISM report, a reading above 50 in the IHS Markit survey indicates expansion in the manufacturing sector.
Despite the overall increase in September, Chris Williamson, chief business …Read the rest of this story
