Economy

ISM: Manufacturing index fell in Oct to lowest point of '24

Written by Ethan Bernard

November 1, 2024

Domestic manufacturing contracted for the seventh straight month in October, according to the latest report from the Institute for Supply Management (ISM). This marks the 23rd time in the last 24 months that it has been in contraction.

The ISM Manufacturing PMI stood at 46.5% in October, 0.7 percentage points lower than the previous month, and the lowest reading so far in 2024. A reading above 50% indicates growth in the manufacturing economy, while a reading below 50% indicates contraction.

However, the overall economy continued in expansion for the 54th month after one month of contraction in April 2020. (A Manufacturing PMI higher than 42.5%, over a period of time, generally indicates an expansion.)

“US manufacturing activity contracted again in October, and at a faster rate compared to last month,” Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, said in a statement on Friday. “Demand continues to be weak, output declined, and inputs stayed accommodative.”

Only five of the 16 domestic manufacturing industries featured registered growth month over month in October. Primary metals and fabricated metal products were both among those in contraction.

One Fabricated Metal Products respondent noted business levels remain depressed.

“It feels like a ‘wait-and-see’ environment regarding where the economy is heading; customers don’t want to commit to inventory, which is resulting in lower order levels,” the respondent said.

A respondent in the Machinery Industry said sales have been very slow the past six months.

“Interestingly, though, inquiries are up more than 30% from a year ago. This indicates there is pent-up demand, but customers are skittish about national and global economic conditions,” the respondent added.

The full October Manufacturing PMI report is available here on the ISM website.

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

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