US manufacturing activity grew faster than expected in October, with the ISM Manufacturing PMI rising to 55.5. Production led the gain, while input price pressures eased but stayed elevated.
The ISM Manufacturing PMI rose from 54.5 to 55.5 in October, beating expectations of 54.7. The reading extends the sector's expansion to ten consecutive months.
Production drives the gain
The production index climbed from 56.7 to 59.0, its highest reading since November 2021. New orders, by contrast, increased from 55.3 to 55.5, a tenth consecutive month of growth.
Because of this gap, ActionForex says October's stronger headline was driven more by production and inventory accumulation than by a substantial acceleration in new demand. All five components contributing directly to the headline PMI were in expansion territory.
Inventories recover, hiring and backlogs slow
Inventories returned to expansion, with the index rising from 48.6 to 51.4. Customers' inventories held at 41.6, a level the report classifies as too low.
Meanwhile, growth in other areas slowed. The employment index eased from 52.7 to 52.4, and backlogs fell from 56.4 to 54.6. Both remained in expansion territory.
Input prices ease but stay elevated
The Prices Paid Index fell from 77.9 to 75.2, below expectations of 77.5. Even so, the index continued to signal widespread increases in input costs, including energy, metals and electronic components.
Supplier Deliveries edged up from 59.0 to 59.1, indicating slightly longer delivery times. The survey points to robust production, less pronounced demand growth and still substantial supply-related inflation pressures.
Source: ActionForex
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