The U.S. manufacturing sector grew at a quicker pace than expected in October, registering its sixth straight month of growth, according to a survey released Monday.
President Donald Trump has made reviving manufacturing a centerpiece of his campaign to be re-elected. Democrat rival Joe Biden’s climate change policies would cost tens of thousands of auto manufacturing jobs, according to Breitbart News Senior Editor-at-Large Rebecca Mansour, and would hurt factories across the country.
The Institute for Supply Management’s index of purchasing managers rose to 59.3 percent, up 3.9 percentage points from the September reading of 55.4 percent and the highest since September 2018. Economists had expected a much smaller gain to 55.7.
Manufacturing has recovered much faster than expected. The index beat forecasts in seven out of the last eight months, with September the only disappointment.
“This figure indicates expansion in the overall economy for the sixth month in a row after a contraction in April,” Timothy R. Fiore, chairman of the ISM survey, said in a statement.
Readings above 50 on the index indicate growth, while those below 50 indicate contraction.
The New Orders component registered 67.9 percent, an increase of 7.7 percentage points from the September reading, indicating faster growth and strong demand. The Production Index registered 63 percent, an increase of 2 percentage points. Both have been growing for 5 months.
The New Export Orders Index registered 55.7 percent, an increase of 1.4 percentage points, the fourth consecutive monthly increase.
The gauge of employment has shifted back into growth after contracting in September. This indicates that manufacturers are hiring more employees.
The Customers’ Inventories Index sank to its lowest figure since June 2010, a level considered a positive for future production.
“Manufacturing performed well for the third straight month, with demand, consumption and inputs registering growth indicative of a normal expansion cycle. While certain industry sectors are experiencing difficulties that will continue in the near term, the overall manufacturing community continues to exceed expectations,” says Fiore.
Of the 18 manufacturing industries measured in the survey, 15 reported growth in October. Among the six biggest manufacturing industries, five reported growth—Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Computer & Electronic Products; and Transportation Equipment. The two reporting contraction in October were: Textile Mills and Printing & Related Support Activities.
“Sales continue to be strong — up 4 percent this September compared to September 2019. The year-to-date level is still 21 percent below last year due to the [COVID-19] shutdown, but sales are stronger than expected and forecast to stay strong through the first quarter of 2021,” an executive in Transportation Equipment manufacturing said.