U.S. October Manufacturing PMI Registers 50.2%

October 2022 Manufacturing ISM^® Report On Business^®

• New Orders Contracting
• Production Growing; Backlogs Contracting
• Supplier Deliveries Faster
• Raw Materials Inventories Growing; Customers’ Inventories Too Low
• Prices Decreasing; Exports Contracting; Imports Growing

(Tempe, Arizona) — Economic activity in the manufacturing sector grew in October, with the overall economy achieving a 29th consecutive month of growth, say the nation’s supply executives in the latest Manufacturing ISM^® Report On Business^®.

The report was issued by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee:

“The October Manufacturing PMI^® registered 50.2 percent, 0.7 percentage point lower than the 50.9 percent recorded in September. This figure indicates expansion in the overall economy for the 29th month in a row after contraction in April and May 2020. The Manufacturing PMI^® figure is the lowest since May 2020, when it registered 43.5 percent. The New Orders Index remained in contraction territory at 49.2 percent, 2.1 percentage points higher than the 47.1 percent recorded in September. The Production Index reading of 52.3 percent is a 1.7-percentage point increase compared to September’s figure of 50.6 percent. The Prices Index registered 46.6 percent, down 5.1 percentage points compared to the September figure of 51.7 percent. This is the index’s lowest reading since May 2020 (40.8 percent). The Backlog of Orders Index registered 45.3 percent, 5.6 percentage points lower than the September reading of 50.9 percent. After one month of contraction, the Employment Index was unchanged at 50 percent, 1.3 percentage points higher than the 48.7 percent recorded in September. The Supplier Deliveries Index reading of 46.8 percent is 5.6 percentage points lower than the September figure of 52.4 percent. This reading, the index’s lowest since March 2009 (43.2 percent), ended a streak of 79 months in ‘slowing’ territory. The Inventories Index registered 52.5 percent, 3 percentage points lower than the September reading of 55.5 percent. The New Export Orders Index reading of 46.5 percent is down 1.3 percentage points compared to September’s figure of 47.8 percent. This is the index’s lowest figure since May 2020, when it registered 39.5 percent. The Imports Index remained in expansion territory at 50.8 percent, 1.8 percentage points below the September reading of 52.6 percent.”

Fiore continues, “The U.S. manufacturing sector continues to expand, but at the lowest rate since the coronavirus pandemic recovery began. With panelists reporting softening new order rates over the previous five months, the October index reading reflects companies’ preparing for potential future lower demand.