Uncertainty ahead of the presidential election was cited as a key reason for new orders continuing to fall, but the pace of decline eased and production was scaled back to the smallest degree in three months.
Although the US manufacturing sector remained in contraction zone in October, there were some signs of the downturn easing, S&P Global Ratings said.
Uncertainty ahead of the presidential election was cited as a key reason for falling new orders.
Business conditions deteriorated modestly, albeit to the least extent since July.
Sectoral employment was modestly down for the third month in a row.
Manufacturers continued to reduce employment and purchasing activity, however.
Inflationary pressures softened, with input costs increasing at the slowest pace in almost a year and output price inflation also easing.
Meanwhile, suppliers’ delivery times lengthened for the first time in three months amid delays widely linked to hurricane-related disruption, a release from S&P Global said.
The seasonally-adjusted S&P Global US manufacturing purchasing managers’ index (PMI) posted 48.5 in October, up from 47.3 in September, but below the 50 no-change mark for a fourth consecutive month.
The latest reading indicates that US business conditions deteriorated modestly, albeit to the least extent since July. New orders decreased for the fourth month running in October, and at a solid pace.
Respondents indicated that uncertainty around the Presidential Election had been a common cause of a drop in new orders as customers hesitated before committing to new projects.
New export orders were also down, albeit only slightly and to a much lesser degree than total new business. Demand weakness was especially evident in Europe.
Falling sales led manufacturers to reduce output for the third consecutive month, but the rate of contraction was the weakest in this sequence and only slight.
There was increasing confidence that output will expand over the coming year, with sentiment rising for the second month running to the highest since May, a release from S&P Global said.
In a number of cases, optimism reflected expectations that business would revive following the election. Higher sales and falling interest rates also supported confidence.
While US business sentiment strengthened, current muted demand conditions meant that firms continued to lower their staffing levels and purchasing activity as October began.
Employment was down for the third month in a row, albeit only modestly. Meanwhile, the rate of contraction in purchasing PMI input prices activity accelerated to a marked pace that was the steepest since June 2023.
The latest fall in purchasing was linked to lower new orders and efforts to cut inventories accordingly. Indeed, stocks of inputs were reduced to the largest extent in 14 months.
Firms purchasing inputs during the month were faced with lengthening supplier lead times for the first time in three months. Delivery delays in part reflected the impact of recent hurricanes, but also capacity issues at suppliers and issues with freight.
Some US firms also reported delays in shipping finished products to clients, contributing to a further build-up in post-production inventories. US Manufacturers continued to deplete outstanding business, however, given ongoing reductions in new orders.
The rate of input cost inflation slowed for the second month running and was the weakest since last November. Where input prices increased, panellists reported higher costs for raw materials. Rising prices for freight were also mentioned.
Similarly, output prices increased at a slower pace in October, after inflation had hit a five-month high in the previous month.
Fibre2Fashion News Desk (DS)
