ISM Manufacturing Index Higher than Expected

The U.S. ISM Manufacturing Index rose to 56.4% in October, from 56.2% in September, ahead of the consensus estimate of 55.0%. This is the index’s highest reading since April 2011.

Here are further details from the report:

• The New Orders Index increased by 0.1% to 60.6%

• The Production Index decreased by 1.8% to 60.8%

• The Employment Index decreased by 2.2% to 53.2%

The Institute reported that “respondents were generally positive about the current business climate; however, there are mixed responses on whether the government shutdown and potential default have had any effect on October's results”.

Manufacturing Reports from Other Countries

China's official PMI rose to 51.4 from 51.1 in September. HSBC's factory activity index also came in at a seven-month high.

HSBC’s index for South Korea was above 50 for the first time since May. Taiwan’s PMI rose to 53 from 52.

Markit’s PMI Index for UK was slightly lower at 56.0 in October from 56.3 in September.

Today's report confirms that the U.S. manufacturing activity has maintained its positive momentum in the past few months after a slow-down in spring. In fact, the ISM report is not surprising after yesterday’s very strong Chicago PMI number.

Do you think that the shutdown did not have any material impact on the US manufacturing activity?

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