U.S. September ISM Manufacturing - Slightly firmer but a subdued picture
September’s ISM manufacturing index of 49.1 is up from August’s 48.7 and marginally beats 49.0 readings in June and March to record its highest reading since February. However there remains little direction to underlying trend.
August’s breakdown contained a positive signal from new orders with a rise to 51.4, but this was not sustained in September with a slip back to 48.9. Production saw some catch up with August new orders rising to 51.0 from 47.8. Employment at 45.3 remains weak if up from 43.8 in August.
Completing the breakdown of the composite was a rise in delivery times to 52.6 from 51.3 and a fall in inventories to 47.7 from 49.4.
Prices paid do not contribute to the composite but at 61.9 from 63.7 in August and 64.8 in July extend a slowing after four straight months above 69, suggesting that the boost to inflationary pressure from tariffs is starting to fade. The index remains above the 2024 high of 60.9 however seen in April of that year.
The exports and imports indices also do not contribute to the composite. Both slipped, exports to 43.0 from 47.6 and imports to 44.7 from 46.0, both at their lowest level since April after the tariff announcement. Price pressures may have peaked, but activity remains restrained by tariffs.
