US manufacturing rebounds in September: ISM

US manufacturing rebounds in September: ISM

The US manufacturing sector rebounded in September after contracting the previous month, although 11 out of 18 sectors still reported slowing business, the Institute for Supply Management said on Monday.

WASHINGTON: The US manufacturing sector rebounded in September after contracting the previous month, although 11 out of 18 sectors still reported slowing business, the Institute for Supply Management said on Monday (Oct 3).

The Commerce Department, meanwhile, reported a drop in construction spending across the country in August, underscoring continued overall economic weakness during the summer.

The ISM purchasing managers index for the month rose to 51.5, in positive territory, from 49.4 in August - below the 50.0 line separating growth from contraction.

New orders and production both expanded, but signs of weakness remain: Employment continued to contract and customer inventories mounted, while a backlog of orders continued to shrink.

"General business conditions are slowly improving with increased sales and sales leads," said one ISM survey respondent in the machinery sector.

The main industries reporting expansion included furniture and related products, textile mills, food and beverage, and computers and electronics.

Those reporting continued contraction included oil and coal, apparel, transportation equipment, and fabricated metal products.

"Oil prices have increased with respect to the first quarter but they remain at low levels affecting our revenue and purchasing power," said a respondent in the oil industry.

At 51.5, the ISM index was still in low-growth mode, but was above the average of 50.3 for the past 12 months.

US construction spending fell 0.7 per cent in August, amid expectations of a gain. Spending fell in all areas: housing, non-housing building, and public/government spending.

Ian Shepherdson, founder and chief economist of Pantheon Macroeconomics, noted the strongest decline in state and local government spending, which he said could fall 15 to 20 per cent year-over-year in the third quarter, and impact estimates of overall economic growth.

For the first eight months of the year, construction spending was up 4.9 per cent over a year ago.

Source: AFP/de

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