By Robb M. Stewart
Manufacturing activity in the U.S. eked out only a modest expansion in October, just ahead of expectations as the overall economy achieved a 29th consecutive month of growth, data from a purchasing managers survey showed Tuesday.
The Institute for Supply Management said its index of U.S. manufacturing activity stood at 50.2 in October, down from 50.9 the month before and the lowest figure since May 2020. Economists polled by The Wall Street Journal expected the index to come in at 50, the breakeven point between a reading that reflects an expanding or a shrinking economy.
The index, which is based on a poll among manufacturers across the U.S., found that new orders are contracting and backlogs are easing even as production grows, supplier deliveries sped up and prices have decreased, while raw materials inventories are growing.
"The U.S. manufacturing sector continues to expand, but at the lowest rate since the coronavirus pandemic recovery began," said Timothy Fiore, chairman of the ISM Manufacturing Business Survey Committee. "With panelists reporting softening new order rates over the previous five months, the October index reading reflects companies' preparing for potential future lower demand."
The U.S. manufacturing sector has been cooling after a strong run the last two years, moderating as a slowing global economy, tighter monetary policy and a shift in spending away from goods hits the sector.
According to the ISM survey's data, the production index widened to 52.3 from 50.6 a month earlier, suggesting that manufacturing output grew in October.
The new orders index picked up to 49.2 from 47.1 the month before, signaling a continued contraction in customers' demand.
The employment index was 50.0 for the month, recovering from 48.7 in September, pointing to an unchanged jobs picture.
"Survey panelists' companies are continuing to manage head counts through hiring freezes and attrition to lower levels, with medium- and long-term demand still uncertain," Mr. Fiore said.
Supply chains continued to normalize in October, according to the survey. The supplier deliveries index fell to 46.8 from 52.4.
Inflation pressures eased in October. The prices index moved to 46.6 in October from 51.7 in September.
Write to Robb M. Stewart at email@example.com
(END) Dow Jones Newswires