Manufacturing cooled in October but continued to expand, the Institute for Supply Management said today.
The Tempe, AZ-based group said its manufacturing index, known as PMI, fell to 58.7% in October from 60.8% the month before. Key parts of the index, including new orders, production and employment also fell off from September, according to a monthly report. The September PMI was the strongest in 13 years.
“I think we’re still in a very good trajectory,” Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, said on a conference call.
The October growth rate is “consistent with pre-hurricane levels,” Fiore said. Hurricane Harvey hit energy-producing regions of Texas on Aug. 25 and stalled over the state for days. The storm caused catastrophic flooding in the region. Another hurricane, Irma, also struck Florida and the southeastern United States in September.
The October index shows “strong demand for manufactured goods at home and abroad,” Joe Brusuelas, chief economist of RSM, a tax and consulting firm, said in a written comment.
Sixteen of 18 industries reported economic expansion in October, ISM said. Among them were machinery, transportation equipment, miscellaneous manufacturing, petroleum and coal products, fabricated metal products and primary metals. No industry reported economic contraction.
The ISM report is based on a survey of 350 purchasing and supply executives. A reading above 50% indicates expansion and below 50% contraction. The PMI has averaged 56.8% the past 12 months and 57.3% for the first 10 months of 2017.
The group’s New Orders Index slipped to 63.4% in October from 64.6% in September. Twelve of 18 industries reported an increase in orders. Three industries, including fabricated metal products, reported a reduction in orders.
ISM’s Production Index declined to 61% from 62.2% in September. Fifteen industries reported production increases. Only the primary metals category reported a decline in output.
The Employment Index slid to 59.8% in October from 60.3% the month before. Fifteen industries reported job gains. Only the apparel category report a cut in jobs.