American manufacturing expanded last month at the fastest pace in 13 years, powered by robust order growth and healthy production, figures from the Institute for Supply Management showed Monday.
Highlights of ISM Manufacturing (September)
Key Takeaways
The strength of the advances in the ISM’s gauges probably includes the recovery and restarting of business following Hurricane Harvey. The storm forced the shutdowns of Houston-area refineries and chemical plants. Many retail establishments, including car dealerships, were flooded and merchandise destroyed.
While increased factory bookings and production reflect a bounce-back from the storm, the nation’s producers had already been on firmer footing because of improving global demand and an increase in U.S. capital spending.
Manufacturing has steadily expanded for the better part of two years as consumers continue to spend and businesses invest. The ISM also reported a pickup in its measure of exports as producers benefit from a U.S. dollar that’s weakened this year, making American-made goods more attractive to overseas purchasers.
Orders will probably remain strong in coming months as a gauge of customer inventories held close to a six-year low. What’s more, the ISM’s order backlogs index crept up to the highest level since April 2011, helping explain why more factories are stepping up hiring.
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Dean Popplewell
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