U.S. October Manufacturing PMI Beats Forecast at 55.5; Production Index Hits 5-Year High

Production index at 59.0, highest since November 2021
Inflationary pressures persist amid rising raw material prices and supply chain disruptions

U.S. manufacturing activity continued to expand for the 10th consecutive month. Production activity, in particular, reached its highest level in about five years. However, inflationary pressures remained high as raw material prices rose and supply chain disruptions persisted.

The Institute for Supply Management (ISM) said on Nov. 2 local time that its October manufacturing Purchasing Managers' Index (PMI) came in at 55.5. That was up 1.0 point from 54.5 the previous month and above the forecast from economists surveyed by Dow Jones.

A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction. After contracting for 10 consecutive months last year, U.S. manufacturing has remained in expansion for 10 consecutive months since January this year.

Among the subindexes, the production index rose 2.3 points from 56.7 the previous month to 59.0. This was its highest level in about five years, since November 2021. The production index has now expanded for 12 consecutive months.

The new orders index, which can indicate future demand, also rose 0.2 point from the previous month to 55.5. New orders remained in expansion for the 10th consecutive month. The employment index came in at 52.4, down 0.3 point from 52.7 the previous month, but remained in expansion for the fourth consecutive month.

Expanding investment related to artificial intelligence (AI) and data centers is seen as having supported the recovery in manufacturing. Production increased in major industries such as computers and electronic products, machinery, and transportation equipment. Five of the six major U.S. manufacturing industries recorded expansion.

Despite the recovery in manufacturing, inflationary pressures remained high. The prices index, which tracks raw material price trends, came in at 75.2, down 2.7 points from 77.9 the previous month. Although the pace of increase slowed, prices continued to rise for the 25th consecutive month.

This content was produced with the assistance of AI translation services.