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U.S. Manufacturing Grows at Fastest Pace in 13 Years

Today is Manufacturing Day and this week's figures from the Institute for Supply Management showed American manufacturing expanded last month at the fastest pace in 13 years, in part because of effects from two major hurricanes. By 24/7 Staff

A measure of U.S. manufacturing activity surged to a near 13-1/2-year high in September as disruptions to the supply chains caused by Hurricanes Harvey and Irma resulted in factories taking longer to deliver goods and boosted raw material prices.

The strength of the advances in the Institute for Supply Management figures partly reflects impacts from both hurricanes.

Harvey forced the shutdowns of Houston-area refineries and chemical plants.

Many retail establishments, including car dealerships, were flooded in the storms and merchandise was destroyed.

Timothy Fiore, the Institute for Supply Management (ISM) survey committee chairman, said on a conference call that the most direct impact from the storms was in the supplier deliveries index, indicating longer lead times; that gauge factors into the overall index.

Survey respondents also mentioned that they received new orders because of the hurricanes, further boosting the headline number.

Seventeen of 18 industries reported growth in September; only furniture makers showed contraction, according to ISM

U.S. Manufacturing Activity Expanded for 100th Straight Month in September
Manufacturing ISM Purchasing Managers Index (PMI)

Orders will probably remain strong in coming months as a gauge of customer inventories held close to a six-year low.

What’s more, the ISM’s order backlogs index crept up to the highest level since April 2011, helping explain why more factories are stepping up hiring.

Economist’s View

“Much of the increase in the headline measure was related to a 7.3-point surge in the supplier deliveries index,” Daniel Silver, an economist at JPMorgan Chase & Co., said in a note.

“But even away from this index, many of the other survey components pointed to strength in the manufacturing sector, including increases in the measures of orders, production and employment.”

Highlights of ISM Manufacturing (September)

  • Factory index climbed to 60.8 (est. 58.1), the highest since May 2004, from 58.8; readings above 50 indicate expansion
  • Measure of new orders increased to 64.6, the strongest since February, from 60.3
  • Employment gauge rose to 60.3, the best reading in more than six years, from 59.9
  • Index of prices paid advanced to 71.5, the highest since May 2011, from 62

National Association of Manufacturers’ Outlook

The National Association of Manufacturers (NAM) Monday Economic Report - October 2, 2017: In the latest NAM Manufacturers’ Outlook Survey, the historically high levels of optimism that manufacturers in the United States expressed during the first two quarters of 2017 continued unabated through the third quarter.

In March, 93.3 percent of respondents felt positive about their own company’s outlook, an all-time high in the survey’s 20-year history. That dropped slightly in the second quarter to 89.5 percent, then rose a bit again in the third quarter to 89.8 percent.

As a result, this year we have seen the highest consecutive three-quarter average - 90.9 percent having a positive outlook for their company - in the survey’s history.

Manufacturing Day 2017

Today, Friday, October 6, 2017, is Manufacturing Day (MFG DAY).

MFG DAY is an annual celebration of modern manufacturing during which manufacturers invite their communities - including students, educators, businesspeople, media, and politicians - to their facilities in a collective effort to educate visitors about manufacturing career opportunities and improve public perceptions of manufacturing.

Started in 2012, MFG DAY has seen participation grow dramatically over the years.

Here are the official numbers when it comes to the number of events, the number of attendees, and the how MFG DAY is affecting the perception of manufacturing.

MFG DAY: 2,716 events from Hawaii to Alaska to Puerto Rico

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