Economic activity in the US manufacturing sector declined in October, according to a new report from the Institute for Supply Management.
‘The manufacturing sector continued its recent trend as it lost momentum again in October. There has been very little month-over-month change in manufacturing over the last four months,’ said Norbert J. Ore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation.
ISM’s Backlog of Orders Index indicates that order backlogs declined for the fourth consecutive month. ISM’s Supplier Deliveries Index reflects slower deliveries for the 10th consecutive month. Manufacturing employment continued to decline in October for the 25th consecutive month. ISM’s Prices Index is above 50% as manufacturers experienced higher prices for the eighth consecutive month. New Export Orders grew in October for the 10th consecutive month. October’s Imports Index declined after 10 consecutive months of growth.
Purchasing and supply executives expressed varying concerns in October. The major uneasiness surrounded the dock strike on the West Coast, with one respondent indicating significant costs incurred due to airfreight costs from Japan. Others were still concerned about a possible war with Iraq. On the upside, a number of companies appear to be thriving in the environment, indicating that orders are up in markets where they compete with imports.
‘The sector lacks drivers at this point. While New Orders are relatively unchanged, the uncertainty with regard to terrorism and potential military action continue to add to the stagnation. Capital spending for additional capacity and IT is very soft. It appears that manufacturing employment is significantly lagging other recoveries,’ added Ore.