Economy: ISM Manufacturing Index for October 2019

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for October 2019:

Predicted: 49.3%
Actual: 48.3% (+0.5 point month-on-month change)

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Previous month: 47.8%

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Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the made-in-the-USA sector contracted.

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From Today's Report:

"...Economic activity in the manufacturing sector contracted in October, and the overall economy grew for the 126th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®..."

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The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

'Customer demand is down, and we are expecting a very soft fourth quarter, without much relief in sight for Q1. Suppliers report the continued rise in labor costs, which are ultimately reflected in the rising product costs.'
(Computer + Electronic Products)

'The chemical manufacturing industry is depressed; demand across many markets globally is down, and pricing is as a result.'
(Chemical Products)

'Automotive sales continue to decrease; however, trucks and SUVs are still providing decent revenue. Cautiously optimistic for the near term.'
(Transportation Equipment)

'Economy is showing slight signs of weakening. The same business headwinds on trade, tariffs, and currency uncertainty are making the environment challenging.'
(Food, Beverage + Tobacco Products)

'Been hearing from lots of my suppliers that their business is down and [they are] looking for more work in the metal processing [and] machining areas. We remain very busy.'
(Fabricated Metal Products)

'Production demand is softening; some [of it is] due to seasonality, [but] much [is] due to customer order rate declining and dealer inventory stabilizing.'
(Machinery)

'Business for thermoplastic resins is very strong, but margins continue to be under pressure due to tariffs and global economy uncertainty.'
(Plastics + Rubber Products)

'Trade cost pressures continue to be a headwind in our business.'
(Paper Products)

'Automotive related manufacturing is definitely slowing in the U.S. I think we are seeing the negative impacts of the tariff war with China and the unsigned [U.S.-Mexico-Canada Agreement] deal starting to hurt consumer confidence, especially on large purchases. Corporations are slowing orders/production accordingly."
(Primary Metals)

'Our business levels have softened over the last three to five months, in the U.S. market [and] globally. Germany and China are both experiencing similar slowdowns. We are in the industrial industry, and the outlook appears to remain soft into Q1 of 2020.'
(Electrical Equipment, Appliances + Components)

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