Manufacturing levels in the United States dropped for the fourth consecutive month, hitting the lowest measurement since May of 2020.
The Institute for Supply Management’s October report was published on Tuesday, showing that the most recent Purchasing Managers Index (PMI) was at 50.2, which is a 0.7 drop from the month prior. The number is also the lowest level it has been since May of 2020 and shows that the manufacturing industry is almost at a flat level, The Hill reported.
The prices index of the survey went down 5.1% to 46.4%, which was also the lowest level since May of 2020. Economists reportedly think the number will drop under the 50 level, which means the economy is decreasing in size.
Unconnected data showed that the S&P global U.S. manufacturing PMI went up to 50.4 for its “final” October reading, up from a previous “flash” reading. The number, however, was still lower than the 52 reading from last month.
“The U.S. manufacturing sector continues to expand, but at the lowest rate since the coronavirus pandemic recovery began,” Timothy Fiore, chairman of the Institute for Supply Management, said in a statement. “With panelists reporting softening new order rates over the previous five months, the October index reading reflects companies’ preparing for potential future lower demand.”
Fiore also said even though manufacturing activity is dropping and could be at a contraction level soon, this doesn’t necessarily equal a U.S. recession, per Market Watch.
“I don’t see a collapse of new orders. I don’t see a collapse of the PMI,” Fiore said.
“Recession jitters among manufacturers won’t disappear any time soon … manufacturing will endure more pain as demand weakens at home and abroad while prices stay high and interest rates remain fairly elevated,” Oren Klachkin, an economist at Oxford Economics, said.
Consumers continue to be concerned about inflation and the state of the economy, which has shown up repeatedly in midterm polling. A recent ABC News/Ipsos survey found that 26% of Americans said the economy is the main factor in who they will vote for, and 23% said inflation was their main issue.
A respondent for the ISM survey said, “Growing threat of recession is making many customers slow orders substantially.”
“International conditions loom large and seem very foreboding. Overall, we still think 2023 will be a positive year, with at least some moderate growth,” another respondent said.
The employment index was 1.3% more than last month, at 50%.
“For those companies expanding their workforce, comments continue to support an improving hiring environment,” Fiore noted.