September 2023 Manufacturing ISM Report On Business Indicates Employment Expanded in September

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector contracted in September for the 11th consecutive month following a 28-month period of growth, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

The U.S. manufacturing sector contracted in September, as the Manufacturing PMI registered 49 percent, 1.4 percentage points higher than the reading of 47.6 percent recorded in August and its highest figure since November 2022 (49 percent). This is the 11th month of contraction, but the third month of positive change.

ISM’s New Orders Index contracted for the 13th consecutive month in September, registering 49.2 percent, an increase of 2.4 percentage points compared to August’s reading of 46.8 percent.

The Production Index registered 52.5 percent in September, 2.5 percentage points higher than the August reading of 50 percent, after two months of contraction preceded by one month of expansion and five months of contraction before that.

ISM’s Employment Index registered 51.2 percent in September, 2.7 percentage points higher than the August reading of 48.5 percent. The index indicated employment expanded in September after contracting for three months.

The delivery performance of suppliers to manufacturing organizations improved for the 12th straight month in September, as the Supplier Deliveries Index registered 46.4 percent, 2.2 percentage points lower than the 48.6 percent reported in August.

The Inventories Index registered 45.8 percent in September, 1.8 percentage points higher than the 44 percent reported in the prior month. Manufacturing inventories contracted at a slower rate compared to August.

ISM’s Backlog of Orders Index registered 42.4 percent, a 1.7-percentage point decrease compared to August’s reading of 44.1 percent, indicating order backlogs contracted for the 12th consecutive month (at a faster rate in September) after a 27-month period of expansion.

The five manufacturing industries that reported growth in September are: Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Textile Mills; Primary Metals; and Petroleum & Coal Products. The 11 industries reporting contraction in September — in the following order — are: Printing & Related Support Activities; Furniture & Related Products; Plastics & Rubber Products; Paper Products; Fabricated Metal Products; Wood Products; Computer & Electronic Products; Machinery; Electrical Equipment, Appliances & Components; Chemical Products; and Transportation Equipment.