Commentary Directory

US ISM Manufacturing PMI: September 2023

Jacob Hess
October 02, 2023

US ISM Manufacturing PMI

10/2/2023 (September 2023)

49.0 (+1.4 pts)

Above Expectations

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New Orders 49.2 (+2.4 pts)
Employment 51.2 (+2.7 pts)
Prices 43.8 (-4.6 pts)

The U.S. manufacturing sector contracted for the 11th straight month in September, according to the latest Manufacturing ISM PMI. However, the rate of contraction slowed, with the Manufacturing PMI registering at 49%, up from 47.6% in August. While new orders and production showed marginal improvement, the prices and backlog of orders indices declined. Employment in the sector rose, and supplier deliveries sped up for the 12th consecutive month. Despite the overall contraction, two major industries—Food, Beverage & Tobacco Products, and Petroleum & Coal Products—saw growth. The report suggests that while demand remains soft, there are signs of improvement as companies prepare for Q4 and the end of the fiscal year.

From ISM

Manufacturing activity remained subdued in September due to weak domestic and foreign demand. Inventories and deliveries continued to shrink, indicating lower contributions to GDP. The sector's fragility was highlighted by a sharp drop in the Prices index to 43.8. Despite these challenges, the contraction in manufacturing was less severe than anticipated, and employment in the sector showed signs of improvement.