By Xavier Fontdegloria
Activity in the U.S. manufacturing sector kept growing at a solid pace in September, albeit at a slightly slower speed than that of August, data from a survey compiled by the Institute for Supply Management showed Thursday.
The ISM Manufacturing Report on Business PMI for September stood at 55.4, down 0.6 percentage points from the August reading of 56.0.
The figure misses expectations from economists polled by The Wall Street Journal, who predicted the PMI to be at 56.3.
This indicator signaled a continued rebuilding of economic activity during the month, ISM said, with all subindexes either remaining in moderate to strong growth territory or slowing their rate of contraction.
"After the coronavirus pandemic brought manufacturing activity to historic lows, the sector continued its recovery in September," said Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee. Respondents said their companies and suppliers continue to operate in reconfigured factories and are becoming more proficient at maintaining output, he said.
ISM compiles the PMI from a survey of manufacturing supply executives whose responses reflect the change, if any, in the current month compared with the previous one in certain areas of business activity. A PMI reading above 50 indicates that the manufacturing economy is generally expanding, while below 50 indicates that it is generally declining.
The production index edged down to 61 from 63.3 a month earlier, while the new orders fell to 60.2 from August's 67.6.
The employment index, despite increasing by 3.2 points to 49.6, remained in contraction territory, signaling a fractional contraction in employment in September compared with the prior month.
The inventories index registered 47.1, 2.7 points higher than the August reading of 44.4. The prices index climbed to 62.8, up 3.3 points from the August reading of 59.5.
Five of the big six industry sectors expanded, the report said. And of the 18 manufacturing industries, 14 reported growth in September.
September's manufacturing PMI also signaled that the U.S. overall economic activity is rebuilding, as a reading above 42.8 over a period of time generally indicates an expansion of the overall economy. This is the fifth consecutive month in which the PMI indicated such expansion.
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(END) Dow Jones Newswires
October 01, 2020 10:35 ET (14:35 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.