Steady Expansion Driven by Strong Production and New Orders
U.S. manufacturing activity expanded for the tenth consecutive month in October, reaching a Purchasing Managers' Index of 55.5%, according to data reported by Supply Chain Dive from the Institute for Supply Management. The figure represents a 1.0 percentage point increase over September. In contrast, the S&P Global U.S. Manufacturing PMI dropped one point to 54.9%.
Growth was supported by solid output and demand indicators. The ISM Production Index climbed 2.3 percentage points to 59%, while the New Orders Index rose 0.2 percentage points to 55.5%. Five of the six largest manufacturing sectors expanded, including machinery, transportation equipment, chemical products, computer and electronic products, and food, beverage, and tobacco products. Inventories returned to growth at 51.4%, while customer inventories remained low at 41.6%.
Price Inflation and Delivery Delays Heighten Anxiety
Despite ongoing production growth, executive sentiment worsened for the third consecutive month. Susan Spence, chair of ISM's Manufacturing Business Survey Committee, reported that 66% of survey comments were negative, driven largely by inflation, geopolitical friction, and raw material shortages.
The Prices Index registered 75.2%, down 2.7 percentage points from September but marking the 25th straight month of price increases. Meanwhile, the Supplier Deliveries Index registered 59.1%, showing slower delivery speeds for the eleventh month in a row. Sourcing leaders in electronics and chemicals reported severe cost spikes and extended lead times on critical components.
Trade Policy and Global Uncertainty Restrain Commitments
Labor and trade indices showed minor shifts during the month. The Employment Index fell 0.3 percentage points to 52.4%, following a September gain of 9,000 manufacturing jobs. The Backlog of Orders Index fell 1.8 percentage points to 54.6%, while imports rose to 52.9% and export orders grew slightly to 51.2%.
Survey respondents highlighted that shifting trade policies, tariffs, and international conflicts are preventing buyers from entering long-term supply agreements. Spence noted that broader industry expansion will remain constrained until global trade and political tensions subside.
