Factory output in US up a little but orders fall

WASHINGTON • America's factories barely expanded last month as faster production cushioned a slowdown in orders that signals a plodding manufacturing sector. The Institute for Supply Management's index rose to 51.9 last month from 51.5 in September, figures from the Arizona-based group showed yesterday.

The median forecast in a Bloomberg survey called for 51.7. A reading above 50 signals expansion. A third-quarter moderation in consumer demand, weak global markets and limited investment by US businesses have kept orders subdued.

While companies have made some progress in trimming bloated inventories, manufacturing has gained little traction after shrinking two months earlier. "The factory sector has essentially been treading water," Mr Omair Sharif, senior US economist at Societe Generale in New York, said before the report.

"The worst is behind us, but prospects for a big pick-up are quite low."

The ISM index has averaged 51 so far this year, little changed from 51.3 last year, when manufacturing was its weakest in the current expansion. The ISM new orders gauge fell to 52.1 last month from 55.1 the prior month, while a measure of production rose to 54.6 from 52.8.

The index of export orders was little changed at 52.5 after 52. The measure of orders waiting to be filled declined from 49.5 to 45.5, matching the lowest since January and indicating production may slow in coming months.

A gauge of factory employment rebounded to 52.9, the first expansion in four months and the highest reading since June last year.


A version of this article appeared in the print edition of The Straits Times on November 02, 2016, with the headline 'Factory output in US up a little but orders fall'. Print Edition | Subscribe