Manufacturing Sector, Economy Show Growth In September
Economic activity in the manufacturing sector expanded in September for the 33rd consecutive month, and the overall economy grew for the 76th consecutive month, reports the Institute of Supply Management (ISM) in its Manufacturing ISM Report On Business.
In September, the ISM Purchasing Manager’s Index (PMI) registered 50.2 percent, a decrease of 0.9 percentage point from the August reading of 51.1 percent, indicating growth in manufacturing for the 33rd consecutive month. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. The September PMI is the lowest reading since May 2013 when the PMI registered 50.1 percent.
The ISM says that a PMI in excess of 43.1 percent over a period of time, generally indicates an expansion of the overall economy. The September PMI, therefore, indicates growth for the 76th consecutive month in the overall economy.
Bradley J. Holcomb, CPSM, CPSD, chair of the ISM’s Manufacturing Business Survey Committee, says, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through September (52.2 percent) corresponds to a 2.9 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI for September (50.2 percent) is annualized, it corresponds to a 2.2 percent increase in real GDP annually.”
Of the 18 manufacturing industries tracked by ISM, seven reported growth in September. In order of growth, beginning with the largest, they are: Printing & Related Support Activities; Textile Mills; Furniture & Related Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Paper Products; and Nonmetallic Mineral Products. The 11 industries reporting contraction in September—listed in order—are: Primary Metals; Apparel, Leather & Allied Products; Petroleum & Coal Products; Wood Products; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; Fabricated Metal Products; Plastics & Rubber Products; Transportation Equipment; and Chemical Products.
For more details from last month’s report, click here.