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Supplier Deliveries at Slower Rate Says ISM

The supply chain had difficulty delivering materials and services meeting production schedules, ISM said.

Manufacturing remained solid in October even as expansion at U.S. factories cooled from a 13-year high a month earlier, figures from the Institute for Supply Management showed on Nov. 1.

ISM production measure cooled to 61 in October from 62.2 while the factory index eased to 58.7 (est. 59.5) from September’s 60.8.

The gauge of supplier deliveries declined to 61.4 from 64.4.

Growth in manufacturing has been steady for the better part of two years, fueled by consumer spending and business investment. Exports have also rebounded this year as companies take advantage of a weak U.S. dollar that’s made American goods more attractive to overseas customers.

In September, the ISM’s gauge was inflated by a surge in the supplier deliveries index, indicating longer lead times as producers scrambled to get back to normal operations following hurricanes Harvey and Irma. That measure fell in October while remaining well above its average from the first eight months of 2017.

The report also showed inventories of materials contracted in October, which “reflects the difficulty of the supply chain to deliver materials and services meeting production schedules,”  Timothy Fiore, the ISM survey committee chairman, said in a release. Eleven industries reported smaller stockpiles for the month. Customer inventories also shrank.

Survey Highlights:

  • The measure of export orders eased to 56.5 from 57 while the prices paid dropped to 68.5 from 71.5.
  • Factory inventories index decreased to 48 from 52.5.
  • The Employment gauge cooled to 59.8 from 60.3.
  • New orders dipped to 63.4 from 64.6 1,

By Agnel Philip

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