Key Points
- US manufacturing growth remained intact in September, but at a slower rate, according to the ISM's Manufacturing Report on Business.
- The sector's benchmark reading, the PMI, came in at 54.5, down 0.1% from August's 54.6.
- The growth rate has slowed for the ninth consecutive month, with production growth slowing for the second month in a row.
US Manufacturing Growth Remains Intact, But at a Slower Rate
US manufacturing growth remained intact in September, but at a slower rate, according to the Institute of Supply Management's (ISM) Manufacturing Report on Business. The sector's benchmark reading, the PMI, came in at 54.5, down 0.1% from August's 54.6. This marks the ninth consecutive month of growth, but the rate has slowed for the second month in a row.
The growth rate has slowed due to various factors, including the ongoing war, renewed tariff threats, and price volatility. The recent surge in price growth has renewed concerns about demand being choked off in some sectors. Additionally, the recent trend of new order and backlog growth has not given confidence for a sustained and steady expansion.
At a Glance
| PMI | 54.5 benchmark reading, indicating growth |
| New Orders | 55.3 down 0.1% from August |
| Production | 56.7 down 1.6% from August |
| Employment | 52.7 up 1.5% from August |
| Prices | 77.9 up 6.9% from August |
Behind the Numbers: ISM's September Report
Behind the Numbers: ISM's September Report
The ISM's report highlights both positive and negative sentiment among panelists. While 40% of panelists' comments were positive, 60% were negative, with concerns about price volatility, tariffs, and the ongoing war. Susan Spence, Chair of ISM's Manufacturing Business Survey Committee, noted that the recent new order and backlog trend of up one month, down the next, has not given her confidence for a sustained and steady expansion.
Spence also highlighted the impact of the ongoing war and renewed tariff threats on the sector. She noted that the recent surge in price growth has renewed her concerns about demand being choked off in some sectors. Additionally, she expressed concerns about the recent trend of imports and new export orders creeping back down toward an index of 50.
What to Watch in the Coming Months
What to Watch in the Coming Months
With the ongoing war and renewed tariff threats, it is essential to monitor the manufacturing sector's growth rate and watch for any signs of price volatility. Additionally, keep an eye on imports and new export orders, as they creep back down toward an index of 50. It is also crucial to note that the recent trend of new order and backlog growth has not given confidence for a sustained and steady expansion.
Key metrics to watch in the coming months include:
- New Orders: 55.3, down 0.1% from August
- Production: 56.7, down 1.6% from August
- Employment: 52.7, up 1.5% from August
- Prices: 77.9, up 6.9% from August
Risk & Opportunity Assessment
| Commercial Risk | Medium | price volatility, ongoing war, and renewed tariff threats |
| Competitive Risk | Medium | price volatility and ongoing war |
| Regulatory Risk | Medium | renewed tariff threats and ongoing war |
| Reputation Risk | Low | no significant reputation risk mentioned in the report |
| Technology Disruption | Low | no significant technology disruption mentioned in the report |
| Commercial Opportunity | Low | no significant commercial opportunity mentioned in the report |
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