IndustryNet Account
For Buyers:
  • View Search History and Save Searches
  • Save Supplier Listings and Add Notes
  • Save and Review RFQs / RFIs / RFPs
For Suppliers:
  • Update Your Listing Information
  • Upgrade Your Listing or Add Categories
  • View and Respond to Leads

 Keep me logged inForgot?

Don't have an account? Create a FREE account now!

IndustryNet Blog

U.S. manufacturing activity weakens for a second straight month

Posted by IndustryNet on Friday, November 2, 2018

100000294_spacexmfgFor a second straight month, U.S. manufacturing activity edged back in October after surging to a fourteen-year high in August, according the Institute for Supply Management’s latest survey of manufacturing executives.

U.S. manufacturing activity now stands at 57.7%, down 2.1% from September’s reading of 59.8% and down 3.6% from August’s reading of 61.3%.

Trade uncertainty continues to weigh on U.S. manufacturers, with a number of respondents to the ISM’s survey citing “stressed supply chains” and “mounting pressure” surrounding the Section 232 tariffs.

Related: Goodbye NAFTA, hello USMCA: what the new trade deal means for U.S. manfuacturers

Today’s headlines, however, offer a glimmer of hope, revealing U.S. trade talks with China may have turned a positive corner ahead of the 25% tariffs slated to go into effect January 1st.

October’s ISM report, though more muted than in previous months, still reflects a growing U.S. manufacturing sector, with October’s 57.7% far beyond the 50% mark that is indicative of expansion. October’s reading represents the 32nd consecutive month of growth in the U.S. manufacturing sector, and the 114th straight month of growth in the economy overall.

Thirteen of eighteen industries surveyed by the ISM reported growth, led by textile mills; electrical equipment, appliances & components; leather & allied products; plastics & rubber products; food, beverage & tobacco products; and computer & electronic products.

Four industries reported contraction in October: wood products; primary metals; nonmetallic mineral products; and fabricated metal products

Solid expansion on the manufacturing job front

The ISM’s Employment Index remained firmly in growth territory, registering 56.8% in October, down 2% from September’s reading. U.S. industrial employment has been in expansion mode for a solid 25 months, according to the ISM’s metrics, and has been so strong that a number of companies are finding it difficult to find the skilled labor needed to keep up with demand.

The Department of Labor reported this morning that the U.S. added 250,000 jobs in October, with the manufacturing sector accounting for 32,000 of those jobs, or about 13%. Job gains were led by the transportation equipment sector, which added 10,000 positions overall.

The U.S. industrial sector has added nearly 300,000 jobs over the past year, according to the BLS.GRANDMA

The robust employment readings coincide with recent IndustryNet reports on growth in the precision machining sector, as well as significant job gains recorded in Georgia and Maryland.

Key measurements stall across the board

Key metrics tracked by the ISM, including new orders, production and employment, all remained in expansion territory, though growth has slowed. Prices continued to rise, and inventories are growing, while exports have eased back.

The ISM’s New Orders Index declined 4.4% to 57.4% in October from September’s reading of 61.8%. New orders hit a high of 65.1% in August. The Production Index declined 4% to 59.9%, while the Employment Index fell 2% to 56.8%.

The ISM’s report follows a number of new reports out last month, including the Commerce Department’s reading on new orders for manufactured goods.

As with the ISM reading, the Department of Commerce found new orders grew at a slower pace after surging in August. New orders for durable manufactured goods edged up just 0.8% in September, following a nearly 5% increase in August.

Prices Surge

The Prices Paid index surged another 4.7% in October, and now stands at 71.6%. This is the 32nd consecutive month manufacturers have paid higher prices for raw materials, according to the ISM.

All but one of the industries surveyed by the ISM reported paying higher prices, led by textile mills; petroleum & coal products; furniture & related products; and electrical equipment, appliances & components.

A number of commodities rose in price according to the survey, including aluminum; aluminum-based products; electronic components; freight; hydrochloric acid; lumber; stainless steel; and steel-based products.

Exports Decline

Exports fell 3.8% in October, with that New Export Order Index skirting contraction territory with a reading of 52.2%.

Industries reporting export growth included textile mills; miscellaneous manufacturing; chemical products; and computer & electronic products.

hot_rolled_steel2Industries whose exports are suffering included wood products; electrical equipment, appliances & components; and primary metals.

Related: U.S. manufacturers look ahead as trade gap widens and tariffs close in

The ISM’s Import Index remained steady, still in expansion territory at 54.3%, but virtually unchanged from the month prior.

This follows a report by the U.S. Census Bureau which found the trade gap has widened, with the nation’s international trade deficit rising 0.8% to $76 billion in September, due to a spike in imports valued at $3.1 billion.

About the ISM

The Institute for Supply Management® (ISM®) is the first and largest not-for-profit professional supply management organization worldwide. Founded in 1915, ISM has over 50,000 members located in 100 countries.

About IndustryNet

IndustryNet maintains up-to-date information on over 400,000 U.S. manufacturers and suppliers of more than 10,000 products and services

IndustryNet lists suppliers across a range of industries, producing everything from steel and aluminum to air compressors, conveyor belts and printed circuit boards.

Visitors can set up a free user accounts, build custom lists of potential suppliers, send quote requests, download company catalogs, view company photo and video libraries, and more.

IndustryNet is also a direct path for U.S manufacturers to increase their visibility among domestic industrial procurers.







Download the FREE eBook:
Cost-effective Industrial Sourcing, an Insider Guide
Cost-effective Industrial Sourcing, an Insider Guide
A must-have guide for engineering, operations, & purchasing executives!
Finding the right industrial supplier and related services can be a costly and tedious process. This free eBook will introduce you to the industrial sourcing process. Expert advice to help you:
  • Explore some innovative methods for uncovering new suppliers
  • Discover the 7 crucial questions you need to ask a potential supplier
  • Learn how to zero in on a supplier's capabilities to help you make an informed decision

Instant download! Enter your information above for instant access to the eBook. Plus, receive a free subscription to IndustryNet Insider.
A service of MNI
 Find a Supplier  About IndustryNet  
 Get Free Quotes  Buyer Reviews
 Expansion & Relocation Guide  Marketing Solutions
 IndustryNet Blog  Add or Upgrade Listing
 ISO Standards & Certifications  Link to IndustryNet
 Browse All Categories  Contact IndustryNet
 Browse All Companies  Legal Information
© 2019 MNI