ISM: Manufacturing Slows In September

By John S. McClenahen Even as the National Association of Manufacturers continued to talk last week about "a healthy recovery" for factories from the 2001 recession, U.S. manufacturing activity was slowing. The Institute for Supply Management's (ISM) closely watched PMI was at 58.5% in September, five-tenths of a percentage point below August's 59%. The new orders component of the PMI declined to 58.1% in September, 3.1 percentage points below August's 61.2%, the Tempe, Ariz.-based group noted in a report released on Oct. 1. The September PMI, however, remained well above its 50% dividing line between expansion and contraction. A figure above 50% indicates that U.S. manufacturing generally is expanding; a number below 50% signals contraction. Indeed, there were some notably positive month-to-month changes among PMI components. For example, the production index increased to 61.6% in September from 59.5% in August, and the employment index advanced to 58.1% in September from 55.7% in August. In August, the U.S. Commerce Department reported separately last Friday that the value of construction put in place across the country was at a seasonally adjusted annual rate of $1.015 trillion, 0.8% higher than the revised July figure of nearly $1.007 trillion. Spending on private construction was at a rate of $777.7 billion in August; public construction spending was at a rate of $237.6 billion.

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