The Manufacturing PMI registered 47.2% in September, matching the figure recorded in August. And that means that economic activity in the manufacturing sector contracted in September for the sixth consecutive month and the 22nd time in the last 23 months, according to The Manufacturing ISM Report On Business issued on Oct. 1.
"Demand remains subdued, as companies showed an unwillingness to invest in capital and inventory due to federal monetary policy — which the U.S. Federal Reserve addressed by the time of this report — and election uncertainty," said Timothy R. Fiore.
Suppliers continue to have capacity, with lead times improving and shortages reappearing. The Supplier Deliveries Index indicated slowing deliveries, registering 52.2%, 1.7 compared to 50.5% recorded in August.
The index reports are as follows:
- The Inventories Index registered 43.9%, down 6.4 percentage points compared to 50.3% reported in August.
- The New Orders Index registered 46.1%, 1.5 percentage points higher than the 44.6% reported in August.
- The Production Index registered 49.8%, 5 percentage points higher than 44. 8% reported in August.
- The Prices Index registering 48.3%, down 5.7 percentage points compared to 54% reported in August.
- The Backlog of Orders Index registered 44.1%, up 0.5 percentage point compared to the 43.6% reported in August.
- The Employment Index registered 43.9%, down 2.1 percentage points than 46% reported in August.
- The New Export Orders Index reading of 45.3%is 3.3 percentage points lower than the 48.6% reported in August.
- The Imports Index registered 48.3%, 1.3 percentage points lower than the 49.6% reported in August.
What respondents are saying:
- "North America demand has started to weaken. Asian demand is slightly higher but shows signs of weakness in future months. Comments tied to automotive builds." [Chemical Products]
- "Global demand continues to remain soft. Fourth-quarter forecasts have been further reduced, with several new programs shifted from 2024 to 2025. Manpower, working capital and supplies are being flexed down in response. The previously anticipated shift from internal combustion engine to electric vehicle (EV) technology has been pushed out due to market response. Long-range plans are being adjusted to incorporate traditional products for longer, while new EV product offerings are being planned for slower rollouts." [Transportation Equipment]
- "The second half of 2024 is trending upward enough to more than compensate for the year-over-year losses we experienced in the first half. We are anticipating a record sales volume for 2024." [Food, Beverage & Tobacco Products]
- "The strategy of customer push-outs last year enabled those customers to adapt to the market. Now, while most companies are seeing a slowdown, we are seeing solid growth. The general slowdown in the economy is allowing for prices to continue to stabilize." [Computer & Electronic Products]
- "A continuing low order rate is resulting in ongoing manufacturing adjustments to balance output with demand." [Machinery]
- "The fourth quarter is slower than anticipated. We won't realize the effect of interest rate adjustments with new project starts until the first quarter of 2025." [Fabricated Metal Products]
- "Business is flat. Waiting for interest rates to drop and the election outcome in November before we confirm our 2025 plans. Currently planning on a flat 2025." [Furniture & Related Products]
- "Our sales continue to be flat. Our customers are telling us that although our products perform very well, they are forced to seek lower-cost components to maintain their sales." [Textile Mills]
- "Sales have slowed this quarter compared to the same time period last year. Adjusting production accordingly." [Miscellaneous Manufacturing]
- "Still hiring to fill vacant positions in production/management. Not adding new jobs. Automotive original equipment manufacturers (OEMs) are starting to slow or cancel orders. The pace is slowing." [Primary Metals]
