Manufacturing Growth Slows, Orders Grow

The pace of manufacturing growth in the United States slowed in October as the Institute of Supply Management’s PMI fell back 0.8 percentage points to 50.8 percent, but the closely watched index also showed promise of growth in several critical measures.

The index for pricing plunged 15 percentage points to 41 percent, the first time that measure has moved into contraction since May 2009.  At the same time, the index for new orders jumped 2.8 percentage points to 52.4 percent, the highest point since April and an indication factory activity would pick up in coming months.

The ISM figures show the manufacturing sector has room to grow, with inventories falling back 5.3 points to 46.7 percent, the lowest point for factory stocks so far in 2011. Manufacturers are showing “more concern and caution about growth in this uncertain economy,” said Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee.