United States: Manufacturing activity rises more than expected in October
November 1, 2010
The ISM manufacturing index (PMI) increased to 56.9% in October, after having fallen last month to the lowest level seen this year (54.4%). The figure surprised the market on the upside, as it had anticipated the PMI expanding only a notch to 54.5%. At the current level, the index points to an expansion for the 15th consecutive month, thus confirming that U.S. manufacturing activity continues to recover. A reading above 50% indicates that the manufacturing sector is expanding, while a reading below 50% is indicative of a contraction. The rise over the previous month was widespread, with three out of the five components performing better than in September. New orders led the improvement with a jump of 7.8 percentage points. The production category also increased markedly (+6.2 percentage points) and the employment category rose, although less vigorously (+1.2 percentage points). On the other hand, supplier deliveries (-1.1 percentage points) and inventories (-1.7 percentage points) decreased over the previous month. At the current level, all five sectors which make up the manufacturing index currently stand above the 50% threshold.