制造业活动仍在增长模式ector’s dynamics start to shift, says ISM

一样在九月、十月manufacturingoutput remained in growth territory despite declining, according to the most recent edition of the Manufacturing Report on Business issued today by the Institute for Supply Management (ISM).

The report’s key metric, the PMI, was 50.2 (a reading of 50 or higher indicates growth), following September’s 50.9 and back-to-back readings of 52.8 in July and August, growing, at a slower rate, for the 29th consecutive month, coupled with the overall economy also growing for the 29th consecutive month. This represents the lowest PMI reading, going back to May 2020’s 43.5.

The October PMI is 5.1% below the 12-month average of 55.3, with October’s 50.2 marking the lowest reading over that period and November 2021’s 60.6 marking the highest.

ISM报告that nine manufacturing sectors grew in October, including: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Machinery; Petroleum & Coal Products; Transportation Equipment; Miscellaneous Manufacturing; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components. And the 10 sectors with declines included: Furniture & Related Products; Wood Products; Paper Products; Textile Mills; Printing & Related Support Activities; Fabricated Metal Products; Chemical Products; Primary Metals; Computer & Electronic Products; and Food, Beverage & Tobacco Products.

The report’s key metrics were mixed in October, including:

-New orders, which are commonly referred to as the engine that drives manufacturing, increased 2.1%, to 49.2, contracting, at a slower rate, for the second consecutive month, with three sectors reporting growth;
-Production, at 49.2, increased 1.7%, growing, at a faster rate, for the 29th consecutive month, with three sectors reporting growth;
-Employment, at 50.0, was unchanged compared to September, following a month of contraction, with nine manufacturing sectors reporting growth;
-Supplier Deliveries, at 46.8 (a reading above 50 indicates contraction) grew, at a faster rate, following contraction in September and snapping a 79-month stretch of readings in the “slowing territory, for its lowest reading since March 2009’s 43.2 reading, with four sectors reporting growth;
-Backlog of orders, at 45.3, were down 5.6%, contracting after a 27-month run of growth, with three sectors reporting growth;
-Inventories, at 52.5, slipped 3% compared to September, growing, at a slower rate, for the 15th consecutive month, and Customer Inventories, at 41.6, were viewed as “too low,” for the same rate of change over the last 73 months; and
-Prices, at 46.6, fell 5.1%, decreasing following 28 consecutive months of growth, for its lowest reading since May 2020’s 40.8 reading
Comments submitted by the ISM member respondents highlighted various themes, including: worries about reduced demand, and a potential recession, among others.

A food, beverage, and tobacco products respondent said that the growing threat of recession is making many customers slow orders substantially, adding that global uncertainty about the Russia-Ukraine war is influencing global commodity markets. And a computers & electronic products respondent pointed to flat business activity and continued electronics market challenges.

In an interview, Tim Fiore, Chair of the ISM’s Business Survey Committee, explained that while October’s data was similar to September’s, the real story was the differences in the data.

“Supplier deliveries are not seen as an issue anymore,” he said. “We are now seeing faster deliveries, not just better deliveries. And the pricing number almost collapsed in a sense and turned in a really good number. It really says that the power between buyers and sellers are reaching an equilibrium. Before it was all sellers’ power but now you see that the buyers now have power, too, and are placing orders. Production being up is good and employment is stable, with a big pause for what may be coming in the first quarter of 2023.”

On the demand side, he noted that customers’ inventories remain too low, with the caveat that it is preferable they don’t head up to the 45-46 range, while remaining flat compared to September. As for new exports orders, which declined 1.3%, to 46.5, he said that is viewed as a sign of contraction, with “no end to that in sight, as Europe and China remain big problems, with China not likely to change its policies and the worst being yet to come for Europe.”

Looking at new orders, he said that there was a low level of contraction in October, and almost flat, which signals that buyers may be getting back into the market, with order streams having been dwindled down and order books depleted due to a lack of new order output.

“That kind of confirms that all of this easing and softening demand with people not placing orders as lead times are too high, prices were too high, order books were really stagnant…the positive of that over the last six months has led to backlog contracting because the output going out is more than the inbound orders that are coming in,” he said. Things [in manufacturing] are no longer supply-constrained and are no longer demand-driven. We are actually in an adjustment period.”