October 2, 2017 – The ISM Manufacturing Index is derived from a survey of purchasing managers and their outlook on overall economic conditions. It looks at factors such as orders for durable goods, industrial production and hiring. It is designed to present a general direction rather than the specific strength of the factory sector and manufacturing activity in the U.S. A reading above 50 is an indicator that the manufacturing sector is growing while a reading below 50 indicates a contraction
The September ISM Manufacturing report came in at a level of 60.8, well above expectations of 58.0 and above August’s level of 58.8. New orders surged to 64.6, well above last month’s reading of 60.3. Production also came in strong reporting 62.2, up from 61.0. Prices rose 9.5 points to 71.5 with raw material prices up for the 19th straight month.
The ISM Manufacturing Index reported strong numbers in 17 of the 18 manufacturing industries. Textile mills, machinery, and nonmetallic mineral products showed the strongest growth. Furniture & related products is the only industry that declined in September. The manufacturing sector is expanding with its reading at 60.8, as any reading above 50 indicates growth. Confidence in the manufacturing sector is high due to elevated readings across the board in production, prices, and new orders.