Asset Management
November 8, 2012
According to the recently released Manufacturing ISM Report On Business®, economic activity in the manufacturing sector expanded in October for the second consecutive month following three months of slight contraction. The report released by the Institute for Supply Management also notes that the overall economy grew for the 41st consecutive month.
According to the report, while production and new orders show growth, Europe’s financial crisis and “fiscal cliff” worries are still a drag on U.S. manufacturing. It showed that the manufacturing sector edged up to 51.7%, an increase of 0.2 percentage point from September’s 51.5%. New orders rose 1.9 percentage points to 54.2%, and production registered 52.4%, an increase of 2.9 percentage points. However, the employment and prices indexes both weakened. The employment index fell 2.6 percentage points to 52.1% and the prices index was off 3 percentage points to 55%.
“The October ISM report provides some reassurance that manufacturing is growing again, albeit at a slow rate, and not slipping back into recession,” said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation (MAPI).
Despite the slow growth, the report indicates that manufacturing outlook should improve.
“The European recession continues to be a drag on manufacturing output, but the nascent improvement in the U.S. housing sector is providing some support to manufacturing activity. As Europe’s recession fades and a modest recovery takes hold, the outlook for manufacturing should improve further – buoyed by both external and internal sources of demand,” noted James Marple, senior economist for TD Economics.
The six industries reporting growth in production during the month of October – listed in order – are: Furniture & Related Products; Apparel, Leather & Allied Products; Paper Products; Petroleum & Coal Products; Computer & Electronic Products; and Miscellaneous Manufacturing. The seven industries reporting a decrease in production in October – listed in order – are: Primary Metals; Machinery; Wood Products; Plastics & Rubber Products; Transportation Equipment; Food, Beverage & Tobacco Products; and Nonmetallic Mineral Products.
Categorias: Asset Management
