U.S. Manufacturing Activity Continued to Expand in September -- IHS Markit
October 01 2020 - 9:31AM
Dow Jones News
By Xavier Fontdegloria
Manufacturing activity in the U.S. extended its rebound to
September, expanding at the fastest pace since early 2019 supported
by a rise in production and new orders, data from a survey of the
manufacturing sector compiled by IHS Markit showed Thursday.
The final reading for the U.S. Manufacturing Business Activity
Index for September was 53.2, down slightly the preliminary figure
of 53.5 and broadly in line compared with the 53.1 level registered
in August.
Economists polled by The Wall Street Journal expected the
indicator to come in at 53.5.
September's reading shows that overall manufacturing activity
expanded in the U.S. for the third consecutive month, and that the
pace of this expansion steadied in September compared with the
prior month.
The U.S. Manufacturing PMI is a weighted average of new orders,
output, employment, supplier's delivery times and stocks of
purchases. A level above 50 indicates expansion, while a reading
below 50 signals contraction. Manufacturing activity didn't expand
at the current rate since January 2019, when the PMI stood at
54.9.
Overall growth was supported by a faster expansion in
production. The quicker rise in output at the end of the third
quarter was the sharpest for 10 months. A number of firms
attributed the expansion to a further uptick in new orders and the
resumption of operations at clients, the report said.
Firms continued to broaden their workforce numbers, as hiring
increased following further upward pressure on capacity, IHS Markit
said.
U.S. manufacturers rounded off a solid quarter which should see
the sector rebound strongly from the steep second quarter downturn,
said Chris Williamson, chief business economist at IHS Markit.
"Encouragingly, companies reported a marked upturn in demand for
plant and machinery, which suggests firms are increasing their
investment spending again after expansion plans were put on hold
during the spring," he said.
Despite the solid expansion registered in September, output
expectations moderated in the month amid increased uncertainty
regarding the coronavirus disease pandemic and the upcoming
presidential election.
"The sector therefore looks to be entering the fourth quarter on
a slower growth trajectory, adding to signs that fourth quarter GDP
growth will wane considerably from the third quarter rebound," Mr.
Williamson said.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
October 01, 2020 10:16 ET (14:16 GMT)
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