October 2011 ISM Reports

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The pace of growth in manufacturing nearly stalled again in October, with the Institute for Supply Management’s (ISM) PMI falling to 50.8 percent, from 51.6 in September (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Comments from respondents are mixed, indicating positive relief from raw materials pricing and continuing strength in a few industries, but there is also more concern and caution about growth in this uncertain economy."
 

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The non-manufacturing sector also grew at a marginally slower pace in September, reflected by a 0.1 percentage point drop (to 52.9 percent) in the non-manufacturing index (now known simply as the “NMI”). "Even though there is month-over-month growth in the Employment Index, respondents are still expressing concern over available labor resources and job growth,” concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee. “The continued strong push for inventory reduction by supply management professionals has resulted in contraction in the Inventories Index for the first time in eight months. Respondents' comments are mixed and reflect concern about future business conditions.”
 

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Wood Products was unchanged, with higher production being offset by fewer new orders. Paper Products expanded, but declines in new, backlogged and export orders suggest more difficulty in the future.

Real Estate and Construction both reported contraction in overall activity during October, while Ag & Forestry remained unchanged.

As the bar chart and table above indicate, input price behavior was mixed during October: prices fell for manufacturing but rose more slowly for the service sector.

Paper and plywood were the only relevant commodities up in price during October; diesel fuel and gasoline were down in price. No relevant commodity was described as being in short supply.