Economy: ISM Manufacturing Index for October 2021

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for October 2021:

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Predicted: 59.9%

Actual: 60.8% (-0.3 point month-on-month change)

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Previous month: 61.1%

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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 grew in October, with the overall economy achieving a 17th consecutive month of growth, 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:

"...'Global supply chain issues continue. Getting anything from China is near impossible -- extreme delays. Microchip and circuit breaker shortages continue and are expected to continue into 2022.'
[Computer + Electronic Products]

'Business is getting stronger, but the supply chain is getting worse every day.'
[Chemical Products]

'Strong sales continue; however, we have diverted chips (semiconductors) to our higher-margin vehicles and stopped or limited the lower-margin vehicle production schedules.'
[Transportation Equipment]

'Import costs and delays hurting business, requiring more safety stock for uncertainty. Rolling blackouts in China starting to hurt shipments even more.'
[Food, Beverage + Tobacco Products]

'Domestic original equipment manufacturer (OEM) capital-expenditure spending is trending up for our business. We are seeing an increase of capital equipment with life spans of more than 10 years in the fourth quarter.'
[Fabricated Metal Products]

'Demand continues to be strong, but we continue to be held back by supply chain issues — logistics delays, as well as capacity and labor issues at suppliers.'
[Electrical Equipment, Appliances + Components]

'Business remains strong, with brisk incoming orders. We have become much more supply driven versus demand driven, due to shortages of labor, materials and freight. Costs continue to increase on all fronts, and we are considering our third price increase of the year for our customers.'
[Furniture + Related Products]

'Customer demand remains high. COVID-19 related supply chain issues still hamper our ability to meet demand. Labor is still difficult for our suppliers to obtain, and labor costs are rising.'
[Machinery]

'Demand for our products remains strong, but we continue to struggle to secure enough raw material to keep our manufacturing lines running.'
[Miscellaneous Manufacturing]

'My prediction is that 2022 will be very similar to 2021 — similar demand, constrained supply, restricted logistics and rampant inflation.'
[Plastics + Rubber Products]..."

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