US manufacturing continues new growth after mid-year slump

01 November 2012 15:38  [Source: ICIS news]

WASHINGTON (ICIS)--A key measure of US manufacturing activity rose in October from September, an industry monitoring group said on Thursday, marking the second month of expansion following three months of industrial contraction.

The Institute for Supply Management (ISM) said that its closely watched purchasing managers index (PMI) rose to 51.7% in October, a slight improvement over September’s reading of 51.5%.

The purchasing managers index is a composite of supplier responses to the institute’s monthly survey on 10 different business performance measures in 18 major manufacturing industries.

A PMI reading above 50% indicates that the nation’s crucial manufacturing sector is expanding. The index had been running just below 50% in June, July and August, an indication that the US manufacturing sector had stopped growing, the first downturn in production since the end of the recession in June 2009.

Among the 10 subsidiary indexes, there was strong growth in October for new orders for manufactured goods – up by nearly two percentage points from September – and in production, which gained almost three points from the prior month.

However, other key measures – including employment, prices, backlogged orders and exports – were still in decline in October, the survey report said.

Among the 18 major manufacturing industries covered by the PMI, eight reported growth in October, including chemical makers and plastics producers.

Industrial sectors reporting declines for last month were some key downstream consumers of chemicals and resins, including wood products, machinery, fabricated metal parts, electrical equipment, appliances and computers.

The institute quoted an unnamed chemicals industry executive as saying: “Europe is still very much a concern, and global recovery is still fragile”.

A plastics industry official, also unidentified, said: “Demand is down slightly due to customers pre-buying ahead of announced material price increases”.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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