Manufacturing Update Sept/Oct 2021
- The IHS Markit Flash U.S. Manufacturing PMI slipped from 60.7 in September to 59.2 in October, the slowest pace of growth since March. Manufacturers in the U.S. continue to cite supply chain bottlenecks and workforce shortages as significant challenges to growth. Output expanded at the weakest pace since July 2020, but employment growth edged higher for the month.
- Supplier delivery times widened to the highest on record, and indices for input and output prices both jumped at the fastest rates in the survey’s history, which dates to mid-2007.
- Manufacturing production fell 0.7% in September. The chip shortage continues to challenge output in the motor vehicles and parts sector, with production in September plummeting 7.2% and output down 15.8% since January. Excluding motor vehicles and parts, industrial production fell 0.1% and 0.2% in August and September, respectively, suggesting broader weaknesses beyond automobiles.
- Manufacturing capacity utilization pulled back for the second straight month from July’s reading of 76.8%, which was the strongest since January 2019, falling to 75.9% in September. Despite easing in the past two months, manufacturing production has risen 4.8% year-over-year, with no change relative to February 2020’s pre-pandemic pace.
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