A report released by the Institute for Supply Management on Monday showed a modest slowdown in the pace of growth in U.S. manufacturing activity in the month of October.
The ISM said its manufacturing index edged down to 60.8 in October from 61.1 in September, although a reading above 50 still indicates growth. Economists had expected the index to dip to 60.5.
“Business Survey Committee panelists reported that their companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee. “All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products.”
“Global pandemic-related issues – worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems – continue to limit manufacturing growth potential,” he added. “However, panel sentiment remains strongly optimistic, with four positive growth comments for every cautious comment.”
The modest decrease by the headline index came as the new orders index slid to 59.8 in October from 66.7 in September.
The production index also edged down to 59.3 in October from 59.4 in September, while the employment index rose to 52.0 from 50.2.
On the inflation front, the prices index climbed to 85.7 in October from 81.2 in September, indicating a faster rate of price growth.
The ISM is scheduled to release a separate report on activity in the U.S. service sector on Wednesday. The services PMI is expected to come in unchanged at 61.9.