November 1, 2017 – The ISM Manufacturing Index is derived from a survey of purchasing managers and their outlook on overall conditions by looking at factors such as orders for durable goods, industrial production and hiring. It gives 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 October ISM Manufacturing report came in at a level of 58.7, below expectations of 59.5 and below September’s level of 60.8. New orders dipped to 63.4, below last month’s reading of 64.6. Production also fell 1.2% in October to 61.0. Prices fell 3.0% to 68.5 with raw material prices up for the 20th straight month.
A slightly weaker ISM Manufacturing Index is reflected in October with 16 of the 18 industries showing growth. Paper products, nonmetallic mineral products, and machinery showed the strongest growth last month. There were two industries that stayed at the same level of activity and no industries reported a decline. Despite the lower manufacturing report compared to the previous month, a reading above 50 still suggests growth.