In September, manufacturing activity in the United States continued its downturn, as reported by the Institute for Supply Management (ISM) on Tuesday.
The ISM disclosed that the Purchasing Managers' Index (PMI) for manufacturing held steady at 47.2 in September, unchanged from August. A PMI below 50 signifies contraction. Economists had anticipated a slight rise to 47.5.
This marks the sixth consecutive month of contraction in manufacturing activity and the 22nd instance of such decline over the past 23 months.
"U.S. manufacturing activity once again contracted in September, maintaining the same rate as the previous month," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee. "Demand continues to be weak, output has declined, and inputs have remained accommodative."
The ISM report highlighted that the new orders index increased to 46.1 in September from 44.6 in August but still resided in contraction territory for the sixth consecutive month.
"Demand remains subdued, with companies hesitant to invest in capital and inventory, influenced by federal monetary policy and election uncertainty, issues addressed by the U.S. Federal Reserve at the time of this report," added Fiore.
Additionally, the production index surged to 49.8 in September from 44.8 in August, reflecting stabilized production execution during the month, as noted by Fiore.
Conversely, the employment index decreased to 43.9 in September from 46.0 in August, indicating an accelerated decline in employment within the manufacturing sector.
The prices index also dropped to 48.3 in September from 54.0 in August, suggesting a decrease in raw material prices after eight consecutive months of increases.
Looking ahead, the ISM is set to release a separate report on service sector activity for September on Thursday. The ISM's services PMI is expected to edge up to 51.6 in September from 51.5 in August, where a reading above 50 indicates growth.
