Report Shows October Manufacturing Activity Highest In Five Months
Reuters reports that the latest Institute for Supply Management (ISM) data shows that US manufacturing activity rose 1.3 percentage points to 53.2 in October, accelerating “to a five-month high in November amid a pickup in new orders and production.” The report may suggest that the manufacturing sector “was regaining its footing after a prolonged slump.” The report “also showed some bottlenecks in the supply chain that could drive prices higher,” and “was the latest indication that the economy continued to gain momentum in the fourth quarter.” RBS Senior Economist Kevin Cummins is quoted saying, “The factory sector has started to show some building momentum, strengthening the case for Federal Reserve action at the December policy meeting.” The AP characterizes the report as “another good sign for the American economy,” adding that “new orders and production grew faster in November” while hiring and export orders “increased but more slowly than they did in October.” Bloomberg News also reports, saying the expansion indicates American producers “are finding more relief in resilient domestic demand.” The median forecast in a Bloomberg survey of economists “was 52.5.” Deutsche Bank Securities US Economist Brett Ryan says, “You’re seeing stabilization in manufacturing.” Bloomberg also reports that 11 of 18 industries surveyed by the purchasing managers’ group “posted growth in November, including petroleum, paper, plastics and computers and electronics.” However, six contracted, “including the printing, wood products, clothing and electrical equipment sectors.”
What This Means For Small Businesses
Small businesses are looking for signals of growing activity across sectors. News that manufacturing, a sector showing particularly uneven growth since the recession, is showing signs of increased activity is welcome, though further data is needed to determine whether this is a long-term trend showing improving economic conditions.
Additional Reading
The Wall Street Journal, Fox Business, and the Chicago Tribune also provide coverage.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
