The fastest rise in manufacturing production and an increase in service sector output accompanied the IHS Markit U.S. Composite Purchasing Managers’ (PMI) Output Index for October. The latest reading, at 55.7, signaled the fastest upturn in private sector output since January, IHS Markit said.
“The U.S. economy seems to have made a strong start to the final quarter of 2017,” said Tim Moore, associate director at IHS Markit. “Resilient service sector growth and an encouraging rebound in manufacturing production combined to generate one of the sharpest rises in private sector output for two-and-a-half years during October.”
The growth of new business volumes moderated from a two-year peak in August. An increase in private sector employment was supported by the steepest rise in manufacturing payroll numbers since June 2015. The October data indicated the greatest pressure on manufacturing supply chains since 2014, due to disruption caused among suppliers after hurricanes Harvey and Irma.
“The main near-term concern for manufacturers is that national supply chain pressures remain the most widespread since those recorded after the heavy snowfall in early 2014,” Moore said. “In particular, survey respondents pointed to depleted inventories among suppliers, ongoing transport delays and sharply rising raw material prices during October.”
There were also positive numbers in export sales, with manufacturers recording the most marked increase in new work from abroad for 14 months, IHS Markit said. Average lead times among vendors, however, saw their greatest lengthening since the heavy snowfall in February 2014.
– Adam Fusco, associate editor