Washington [US], October 1 (ANI): US manufacturing activity remained in expansion territory for the ninth consecutive month in September, even as a sharp rise in prices pointed to growing cost pressures for manufacturers, according to the latest PMI data report from the Institute for Supply Management (ISM).
The ISM Manufacturing Purchasing Managers' Index (PMI) is a monthly indicator that tracks activity in the US manufacturing sector. A reading above 50 per cent indicates that the sector is generally expanding, while a reading below 50 per cent indicates contraction.
The data highlighted that the Manufacturing PMI stood at 54.5 per cent in September, down slightly from 54.6 per cent in August. The overall US economy continued to expand for the 23rd consecutive month, according to ISM.
ISM said manufacturers' comments reflected concerns over pricing volatility, tariffs and the Iran war. Pricing volatility was mentioned in 46 per cent of negative comments, while tariffs were cited in 34 per cent and the Iran war in 30 per cent.
Of the six largest manufacturing industries, five expanded in September — Computer & Electronic Products, Food, Beverage & Tobacco Products, Transportation Equipment, Machinery and Chemical Products.
The data showed that demand conditions improved during the month. The New Orders Index rose to 55.3 per cent from 53.7 per cent in August, marking its ninth consecutive month of expansion. The Backlog of Orders Index also increased to 56.4 per cent from 51.8 per cent.
However, the increase in prices was a key feature of the September data. The Prices Index jumped 6.8 percentage points to 77.9 per cent, from 71.1 per cent in August. ISM said the index returned to its level at the start of the Iran War.
“The Manufacturing PMI registered 54.5 per cent in September, 0.1 percentage point below the August figure of 54.6 per cent,” said Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.
Production continued to expand but at a slower pace. The Production Index stood at 56.7 per cent, down from 58.3 per cent in August. Despite the slowdown, production has now expanded for the 11th consecutive month.
Employment also improved during September. The Employment Index rose to 52.7 per cent from 51.2 per cent in August, indicating continued expansion in manufacturing employment.
The data also showed pressure on inventories. The Inventories Index fell to 48.6 per cent from 50.6 per cent, moving back into contraction.
Export orders continued to grow, although at a slower pace. The New Export Orders Index stood at 50.9 per cent, down from 53.2 per cent in August. The Imports Index also declined to 51 per cent from 52.5 per cent.
Overall, the September data showed that US manufacturing continued to expand, supported by stronger new orders and employment, while rising prices emerged as a key pressure point for the sector. (ANI)
US manufacturing index expands for ninth straight month, but price pressures surge in September
