(Bloomberg) – Manufacturing in the United States rose less than expected in September as new orders retreated from a 16-year high and production slowed.
A plant activity gauge fell to 55.4 from 56 a month earlier, which was the strongest since late 2018, according to data from the Institute for Supply Management released Thursday. Readings above 50 indicate manufacturing is expanding, and September’s figure was lower than economists’ median projection of 56.5 in a Bloomberg survey.
Although more flexible than expected, the manufacturing gauge is still at its third highest level since 2018. The Covid-19 pandemic and associated business closures have crippled factory production, but with the wider opening of the economy, the sector quickly recovered. However, as the initial wave of pent-up demand subsided, the pace of growth of domestic producers also eased.
A measure of new orders fell 7.4 points to 60.2, the index’s first drop since April. Orders may move in at a more sustainable pace, as the group’s customer inventory measurement showed the fastest rate of contraction in more than a decade. The ISM production gauge fell 2.3 points to 61.
The measure of inventories at factories rose to 47.1, indicating that inventories were declining at a slower pace. At the same time, a gauge of customer inventories slipped to 37.9, indicating an even faster rate of decline that could translate into further production gains in the coming months.
The factory employment indicator improved to 49.6, approaching stabilization while still marking the 14th month of contraction. The Labor Department’s monthly employment report, released on Friday, is expected to show manufacturing payrolls increased by 35,000 in September.
The ISM’s export measure rose 1 point to 54.3, underlining little more than a gradual recovery in demand abroad.
© 2020 Bloomberg L.P.
Fusion Media or anyone involved in Fusion Media will not accept any responsibility for any loss or damage resulting from reliance on any information, including data, quotes, graphics, and buy / sell signals contained in this website. Be fully informed of the risks and costs associated with trading in the financial markets, it is one of the riskiest forms of GossipMantri possible.