Economy
ISM: US Manufacturing Slowed in September
Written by David Schollaert
October 3, 2022
US manufacturing activity grew at its slowest pace in nearly two-and-a-half years in September, according to the Institute for Supply Management (ISM). Though still expanding last month, manufacturing was slowed as new orders contracted amid aggressive interest rate increases from the Federal Reserve meant to cool demand and tame inflation.
The ISM’s report also showed a measure of manufacturing employment contracted last month for the fourth time this year. A gauge of inflation at the factory gate decelerated for a sixth straight month.
September’s Manufacturing PMI fell to 50.9%, down from 52.8% in August and the lowest reading since May 2020. Despite the month-on-month decline, September’s result marked the 28th consecutive month of expansion, as any index reading above 50% indicates growth in the manufacturing sector.
“The US manufacturing sector continues to expand, but at the lowest rate since the pandemic recovery began,” said Timothy Fiore, chairman of ISM’s Manufacturing Business Survey Committee. “Companies are now managing headcounts through hiring freezes and attrition to lower levels, with medium- and long-term demand more uncertain.”
Fiore, however, noted that firms didn’t provide feedback on large-scale layoffs, indicating that “companies are confident of near-term demand.”
Nine manufacturing industries, including machinery, transportation equipment, and computer and electronic products reported growth. Furniture and related products as well as textile mill and wood products were among the seven industries reporting a contraction.
The report’s forward-looking new orders sub-index fell to 47.1 in September, down from 51.3 the month prior and the lowest reading since May 2020. It was the third time this year that the index has contracted.
An interactive history ISM Manufacturing Report on Business PMI index is available on our website. If you need assistance logging into or navigating the website, please contact us at info@SteelMarketUpdate.com.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
Read more from David SchollaertLatest in Economy
SMU Community Chat: Tariff-induced panic purchases, inflation, and calculating costs
Chief executive of the Institute for Supply Management (ISM), Tom Derry highlighted how reactive buying behavior has shifted the market into a quiet demand period. Derry presented ISM data during the weekly SMU community chat.
Architecture billings still sluggish despite project inquiry uptick
The Architecture Billings Index (ABI), a leading indicator for non-residential construction activity, declined for an eighth straight month in June.
Beige Book: Tariff pressures mount, flat outlook
All districts reported “experiencing modest to pronounced input cost pressures related to tariffs, especially for raw materials used in manufacturing and construction.”
Steel exports recovered in May but still historically low
US steel exports rose 10% from April to May but remained low compared to recent years. This came just one month after exports fell to the lowest level recorded in nearly five years.
AISI: Raw steel production ticks up near recent high
The volume of raw steel produced by US mills inched higher last week, according to the American Iron and Steel Institute (AISI). After steadily increasing in April and May, domestic mill output stabilized in early June and has remained historically strong since.