October 4, 2022
MANUFACTURING PMI®
The U.S. manufacturing sector grew in September, as the Manufacturing PMI® registered 50.9 percent, 1.9 percentage points below the reading of 52.8 percent recorded in August. “The Manufacturing PMI® continued to indicate sector expansion and U.S. economic growth in September. Of the five subindexes that directly factor into the Manufacturing PMI®, three (Production, Supplier Deliveries and Inventories) were in growth territory. Of the six biggest manufacturing industries, four — Machinery; Transportation Equipment; Food, Beverage & Tobacco Products; and Computer & Electronic Products — registered moderate-to-strong growth in September. The Production Index increased 0.2 percentage point and remained in expansion territory. The Supplier Deliveries Index slowed at a slower rate while the Inventories Index grew at a faster rate, indicating continued easing of supply chain congestion. Seven of the 10 subindexes were positive for the period; a reading of ‘too low’ for the Customers’ Inventories Index is considered a positive for future production,” says Fiore. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A Manufacturing PMI® above 48.7 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the September Manufacturing PMI® indicates the overall economy grew in September for the 28th consecutive month following contraction in April and May 2020. “The past relationship between the Manufacturing PMI® and the overall economy indicates that the Manufacturing PMI® for September (50.9 percent) corresponds to a 0.8-percent increase in real gross domestic product (GDP) on an annualized basis,” says Fiore.
Source: ISM – Institute for Supply Managment
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