Manufacturing continues to grow, but at a slower pace

November 1, 2017

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By Bobby Bono and Mike Goulet

US manufacturing continued to grow in October for the 14th straight month, but at a slower pace, according to the Institute for Supply Management (ISM). The October Purchasing Manager’s Index (PMI) for manufacturing dropped 2.1 points to 58.7 from the previous month’s index of 60.8. While the drop is nearly a full point lower than some analysts expected, the PMI remains strong and near historically high numbers.

The larger than expected drop likely reflects the uncertainty created by the hurricanes as manufacturers try to navigate the full impact of the storms and recovery efforts – both in terms of scale as well as timing. Survey responses reflected tempered optimism, ranging from “our plants are sold out for 2017” and “things are really picking up” to concerns over the hurricanes and “raw material costs on the rise.” Raw material prices have climbed higher for 20 consecutive months, according to ISM. Overall, the October ISM report reflects a strong US manufacturing sector, but companies will want to monitor whether the PMI slowdown continues over the next few months.

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