U.S. Manufacturing Activity Increases for 5 Months in a Row

Despite being plagued by long lead times for raw materials, economic uncertainty, and a pandemic with no foreseeable end, U.S. manufacturing activity has somehow continued to increase for 5 months in a row.

According to the latest report from the Institute for Supply Management® (ISM®), its manufacturing index registered 55.4% in September.  While this is 0.6 percentage points lower than August’s reading of 56%, ISM’s Timothy Fiore stated that “this figure indicates expansion in the overall economy for the fifth month in a row after a contraction in April, which ended a period of 131 consecutive months of growth”.  According to ISM, an index above 42.8% generally indicates an expansion of the overall economy.  This means that for the past 5 months, U.S. manufacturing activity has shown continuous growth.

Key Takeaways:

• The New Orders Index registered 60.2%, down 7.4 percentage points from the August reading of 67.6%. However, manufacturing activity from Electrical Equipment, Appliances, & Components industries reported growth in new orders in September.
• The Production Index registered 61%, down 2.3 percentage points compared to the August reading of 63.3%. However, Electrical Equipment, Appliances, Computer & Electronic Products, and Components manufacturing industries reported growth in production in September.
• The Backlog of Orders Index registered 55.2%, a 0.6 percentage point increase from the August reading of 54.6%. Electrical Equipment, Appliances, and Components manufacturing industries reported growth in backlog of orders, while Computer & Electronic Products manufacturing saw a decrease in backlog of orders in September.
• The Employment Index registered 49.6%, a 3.2 percentage point increase compared to the August figure of 46.4%. The Computer & Electronic Products industry was among the 8 manufacturing industries to report growth in production in September.
• The Supplier Deliveries Index registered 59%, a 0.8 percentage point increase from the August reading of 58.2%. 16 of 18 industries reported slower supplier deliveries in September, including Electrical Equipment, Appliances, Computer & Electronic Products, and Components manufacturing industries.

While it seems that U.S. manufacturing has seen a complete rebound, many individual companies and procurement officers are noting the difficulty in procuring goods needed to make end products, specifically citing component lead times as a major roadblock.  At Aegis Components, our network of global suppliers has withstood over a decade of scrutiny and refinement.  Even the most minor supply chain hiccup can produce a ripple effect of delays and withered profits.  Add Aegis components to your approved vendor list, and let our team help you make strategic and well-informed purchasing decisions.  Contact us today or click the button below!

Sources:

www.washingtonpost.com

www.prnewswire.com