U.S. manufacturing grows for fifth month in row
US manufacturing output grew for the fifth straight month in October, suggesting stronger economic growth in the fourth quarter, an industry survey released Friday showed.
The Institute for Supply Management (ISM) said its purchasing managers index for manufacturing activity rose to 56.4 percent last month from 56.2 percent in September.
The growth in output was unexpected; analysts had forecast the PMI would fall to 55.0.
The October reading topped the third-quarter average of 55.8, pointing toward stronger gross domestic product growth in the fourth quarter, Moody’s Analytics said.
All three of the index’s main components remained in growth territory. New orders increased slightly while production fell 1.8 points and employment fell 2.2 points.
The strongest gainers were exports, up 5.0 points, and inventories, up 2.5 points.
“The panel’s comments are generally positive about the current business climate; however, there are mixed responses on whether the government shutdown and potential default have had any effect on October’s results,” Bradley Holcomb, chair of the survey committee, said in a statement.
An executive in the computer and electronic products industry said: “Telecom market –wireless and VOIP — appears to be spiking. We are very busy; busier than we have ever been.”
“Business continues to improve every month for the past nine months,” said a furniture industry supply executive.
But the October 1-16 partial government shutdown over the government battle on the budget and the debt ceiling cast a cloud over some industries.
“The government shutting down and threatening to go into a default position is causing all kinds of concerns in our markets,” said an executive in the fabricated metal products industry.
Robert Kavcic, an economist at BMO Capital Markets, said the October report was encouraging.
“The US manufacturing sector has staged a strong comeback from the spring soft patch, and appears to have held that momentum despite October’s political drama,” Kavcic said.