–ISM Manufacturing Index Rose to 59.3 in October, Above Expectations
–Sept Construction Spend Softer Than Expected; Residential Surged
By Kevin Kastner
WASHINGTON (MaceNews) – The October ISM index showed U.S. manufacturing sector activity improved further, showing extraordinarily strong expansion.
The headline PMI index rose to 59.3 from 55.4 in September, well above expectations for a small increase to 55.7.
The new orders index surged to 67.9 from 60.2 in September, while the production reading rose to 63.0 from 61.0, both indicating even faster expansion.
At the same time, inventories expanded, and supplier deliveries slowed, further signs that demand remains strong.
The employment index moved above the breakeven point to 53.2 from 49.6 in September. ISM noted that most panelists are expanding their workforce.
The one negative mentioned by ISM was that suppliers are having a hard time keeping up with the strong pace of demand, with both labor and materials shortages cited.
The Markit manufacturing index released earlier Thursday was revised up slightly to 53.4 from the 53.3 flash estimate. The index was 53.2 in September.
Construction spending for September, released at the same time as the ISM report, rose by only 0.3%, well below the 0.9% increase expected due to sharp declines in the private nonresidential and public sectors. Year-to-date construction spending was 4.1% above the same period a year earlier.
Private residential construction surged by 2.8%. Calculations using the published data show that private new home construction rose by 4.7%, not a surprise given the home building data already released for the month.
Single-family home construction rose by 5.7% and multi-family building rose by 1.2%. Home remodeling was down 0.4%, suggesting current owners have shifted to trading up instead of staying in their current home.
Offsetting the gain in home construction, private nonresidential construction spending fell by 1.5% on declines in almost every key industry, while public construction was down 1.7%.
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Contact this reporter: kevin@macenews.com.
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