U.S. manufacturing expands for 10th month despite Iran war and price concerns

The U.S. manufacturing sector expanded for the tenth consecutive month in October, reaching a Purchasing Managers’ Index (PMI) of 55.5%, according to the Institute for Supply Management (ISM). This marks a 1 percentage point increase from September, indicating continued growth as a PMI above 50% signals expansion.

The overall economy also grew for the 24th consecutive month, ISM reported. However, the S&P Global U.S. Manufacturing PMI fell slightly to 54.9, down one point from September. Industry leaders noted that the Iran war and price volatility are significant factors weighing on the sector.

Susan Spence, chair of ISM’s Manufacturing Business Survey Committee, highlighted increased concerns about inflationary pressures and raw material availability, worsened by the Iran war and ongoing trade wars. These issues contributed to a rise in negative sentiment among respondents compared to the previous month.

Five of the six largest manufacturing industries—machinery; computer and electronic products; transportation equipment; chemical products; and food, beverage, and tobacco products—showed expansion in October. The New Orders Index also grew for the tenth month, reaching 55.5%, while the Production Index increased to 59%.

Despite challenges, the Prices Index remained in expansion at 75.2%, though it decreased from September’s 77.9%. The Backlog of Orders Index and Employment Index both saw slight declines. The manufacturing sector added 9,000 jobs in September, and the Supplier Deliveries Index indicated slowing deliveries, reflecting ongoing supply chain constraints.