Key manufacturing index at highest level in two years

Economic activity in the manufacturing sector grew to its highest level in two years in October, the Institute for Supply Management (ISM) said in a report issued Monday.

ISM’s manufacturing index rose in October to 59.3 percent, which is 3.9 percentage points higher than the previous month and the highest level since September 2018. 

October was the sixth month in a row in which the index showed an expansion in the overall economy, following a contraction in April at the start of the coronavirus outbreak in the United States, ISM said.

“The manufacturing economy continued its recovery in October,” Timothy Fiore, chairman of the ISM manufacturing business survey committee, said in a news release. “Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories; with every month, they are becoming more proficient at expanding output.” 

Five of the six largest manufacturing industries saw strong growth in October, ISM said. Those industries are fabricated metal products; food, beverage and tobacco products; chemical products; computer and electronic products; and transportation equipment.

New orders, production and employment all grew, with employment shifting to expansion territory from contraction territory, where it had been since summer of 2019.

“Manufacturing performed well for the third straight month, with demand, consumption and inputs registering growth indicative of a normal expansion cycle,” Fiore said. “While certain industry sectors are experiencing difficulties that will continue in the near term, the overall manufacturing community continues to exceed expectations.”

ISM’s report is one of the last pieces of economic data that’s being released before tomorrow’s presidential election.