Data released on Monday showed the ISM Manufacturing Index dropped in October from 61.1 to 60.8; a reading above expectations. According to analysts at Wells Fargo, the report demonstrated that activity remains strong despite persistent supply issues. They point out purchasing managers across industries continue to cite strong demand.
Key Quotes:
“October's ISM manufacturing report demonstrates that activity remains strong despite persistent supply issues. The overall index slid to 60.8 last month, largely due to a 6.9 point drop in new orders. That said, purchasing managers across industries continue to cite strong demand. The largest gains came from two components that continue to be at the center of supply issues: prices paid and supplier deliveries.”
“The employment component of the ISM has diverged from other employment readings in recent months. But squaring the expansionary reading for October with the pickup in the other regional PMI employment indices bodes well for manufacturing hiring in October's nonfarm payroll report to be released Friday.”
“Our pressure gauge continues to demonstrate little, if any, improvement in supply issues. The number of ships on average awaiting port space off the West Coast rose to a record 67 in October and the price of shipping a container across the Pacific Ocean remains more than six times above pre-pandemic norms.”
