ISM manufacturing records growth in September

According to the latest productions Supply Management Institute (ISM) Activity Report, Economic activity in the manufacturing sector increased in September, with the overall economy posting a 28th straight month of growth.

“September’s manufacturing PMI came in at 50.9%, down 1.9% from August’s 52.8% reading. April and May 2020. The manufacturing PMI® this figure is the lowest since May 2020, when it recorded 43.5%. The new orders index slipped back into contraction territory at 47.1%, down 4.2 points from the 51.3% recorded in August,” said Timothy R. Fiore, chairman of the Inquiry Committee on manufacturing companies at the ISM. “The Production Index reading of 50.6% represents an increase of 0.2 age points from the August figure of 50.4%. The price index recorded 51.7%, down 0.8% from August’s figure of 52.5%. This is the lowest reading for the index since June 2020 (51.3%). The backlog index came in at 50.9%, 2.1 points lower than August’s reading of 53%. After only one month of expansion, the employment index contracted to 48.7%, 5 points less than the 54.2% recorded in August. The Supplier Deliveries Index reading of 52.4% is 2.7% below the age points from August’s figure of 55.1%. This is the lowest reading for the index since before the coronavirus pandemic (52.2% in December 2019). The stocks index was up 55.5%, 2.4% age points higher than August’s reading of 53.1%. The new export orders index contracted to 47.8%, down 1.6% from August’s figure of 49.4%. This is the lowest reading for the index since June 2020, when it recorded 47.6%. The import index remained in expansion territory at 52.6%, 0.1% above August’s reading of 52.5%. Of the six largest manufacturing industries, four — machinery; transportation equipment; food, beverages and tobacco; and computer and electronic products – recorded moderate to strong growth in September.

“Manufacturing increased for the 28th consecutive month. Panelists’ companies have slowed their hiring activities; month-over-month supplier delivery performance was the best since December 2019; price growth has slowed significantly (with an index at 60% or less) for the third month in a row; and timelines continue to ease for capital goods and production materials,” Fiore said. “In the comments from the panelists, there was no mention of large-scale layoffs; this indicates that companies are confident about near-term demand, so the main objectives are to manage mid-term workforces and supply chain inventories.

Nine manufacturing industries posted growth in September, in the following order: non-metallic mineral products; machinery; plastic and rubber products; miscellaneous manufacturing; clothing, leather and related products; transportation equipment; food, beverages and tobacco; computer and electronic products; and electrical equipment, apparatus and components. the seven industries reporting a contraction in September compared to August, in the following order: furniture and related products; textile factories; wood products; printing and related support activities; paper products; chemical products; and fabricated metal products.

What respondents say:

  • “Supply chain issues for all electronic components and custom build materials are rare due to capacity and skilled labor shortages. The cost of energy continues to negatively impact the cost of freight. [Computer & Electronic Products]
  • “Concerns about the global economic slowdown are growing and (we are seeing) some customers withdrawing orders.” [Chemical Products]
  • “Production is stable, helping to reduce the backlog amid slightly slower demand.” [Transportation Equipment]
  • “Almost all suppliers are experiencing an increase in delivery times. It seems like no one wants to keep an inventory handy anymore. [Food, Beverage & Tobacco Products]
  • “Business is flat or down due to inflation and interest rates. Difficult to find and keep employees due to competitors’ salary increases. [Fabricated Metal Products]
  • “Supply chain constraints on many items are still an issue; Staffing on the production side continues to be a significant issue. On the other hand, we have more inventory than necessary on some key items – especially imports – and have started to reduce open purchase orders and reduce long-term forecasts on these items to reduce inventory. [Machinery]
  • “Business continues to be strong. Some products in the supply chain are beginning to stabilize, while others continue to disrupt production. Electrical and wiring components continue to cause significant problems. (We) cannot run as regularly as we would like. [Electrical Equipment, Appliances & Components]
  • “Quotes and orders still strong; however, we are unable to accept new orders for the 2022 shipment due to motor and electronic component shortages. [Miscellaneous Manufacturing]
  • “The supply chain is always under pressure and it is challenging our manufacturing plants in terms of availability. We have high demand and need to run. [Nonmetallic Mineral Products]
  • “Business is still strong; raw materials become more available and the price of some raw materials goes down. [Plastics & Rubber Products]

Manufacturing ISM Business report data are seasonally adjusted for new orders, production, employment and inventory indices.


September 2022

Index Series Index


Series Index



To change

Direction Rate of change Trend* (Months)
Manufacturing PMI® 50.9 52.8 -1.9 Growth Slow down 28
New orders 47.1 51.3 -4.2 Contracting More and more 1
Production 50.6 50.4 +0.2 Growth Faster 28
Use 48.7 54.2 -5.5 Contracting More and more 1
Supplier deliveries 52.4 55.1 -2.7 Slow-down Slow down 79
Inventories 55.5 53.1 +2.4 Growth Faster 14
Customer inventories 41.6 38.9 +2.7 Too low Slow down 72
Prices 51.7 52.5 -0.8 Increasing Slow down 28
Backlog 50.9 53.0 -2.1 Growth Slow down 27
New export orders 47.8 49.4 -1.6 Contracting Faster 2
Imports 52.6 52.5 +0.1 Growth Faster 4
GLOBAL ECONOMY Growth Slow down 28
Manufacturing sector Growth Slow down 28

Edward N. Arrington