US manufacturing sector nears recovery; construction spending solid
© Reuters. FILE PHOTO: An employee works on an assembly line at startup Rivian Automotive's electric vehicle factory in Normal, Illinois, U.S. April 11, 2022. REUTERS/Kamil Krzaczynski/File Photo
The ISM said that its manufacturing PMI increased to 49.0 last month, the highest reading since November 2022, from 47.6 in August. Still, September marked the 11th straight month that the PMI remained below 50, which indicates contraction in manufacturing. That is the longest such stretch since the 2007-2009 Great Recession.
Comments from respondents in the survey remained mixed. Makers of transportation equipment said"orders and production remain steady, and we are maintaining a healthy backlog." Orders for long-lasting manufactured goods increased 4.2% year-on-year in August and business spending on equipment appears to have remained strong in the third quarter after rebounding in the April-June period.
The survey's measure of prices paid by manufacturers fell to 43.8 from 48.4 in August. This bodes well for goods disinflation, but the striking auto workers could boost prices of motor vehicles. Rising energy prices could drive inflation higher, but also support manufacturing. "Attrition remained the primary source of head-count reductions, but hiring freezes were more prevalent," said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee.
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