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ISM Report: Manufacturing Contracts for 12th Consecutive Month

Nov. 2, 2023
The October Manufacturing PMI indicates the overall economy fell back into contraction territory after growing slightly in September.

Manufacturing economic activity continued to contract last month, according to the Institute for Supply Management’s October 2023 manufacturing sector report. Coming in at 46.7%, the October Purchasing Manager’s Index registered 2.3 points lower than September’s reading of 49%.

"Of the five subindexes that directly factor into the Manufacturing PMI, only one (the production index) is in expansion territory, down from two in September,” said Timothy Fiore, chair of the ISM’s manufacturing business survey committee.

At 50.4%, the production index continued to expand, although down 2.1 points from September’s figure. Anything lower than 50% represents contraction. The employment index fell 4.4 points from September’s reading of 51.2% to 46.8%, bringing it back into contraction territory. Registering 45.5%, the new orders index continued to contract after a 3.7 percentage point decrease.

Only two industries reported growth in October: food, beverage & tobacco products and plastics & rubber products.

Attitudes of respondents in the comments section of the survey are largely dependent on industry, with some executives reporting concern and others reporting confidence. “It’s definitely hard to guess the future,” notes a respondent in the furniture & related products sector.

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