Today’s report from The Institute for Supply Management showed that the manufacturing sector was not in contraction during the month of October. The PMI came in at 51.7%, versus 51.5% in the month of September. Bloomberg was calling the economist consensus reading at 51.5%, so today’s report is probably going to be a status quo report.

Components of the report showed that new orders, production and employment grew in the month. Supplier deliveries were said to be faster and inventory levels were largely unchanged.

What is important here is that the PMI is showing that this was the second consecutive month of growth, after having seen three consecutive months of slight contraction. It further shows that the economy overall has now grown for forty-one months in a row. Here were the components:

• The New Orders Index registered 54.2%, an increase of 1.9 percentage points from September, indicating growth in new orders for the second consecutive month.
• The Production Index registered 52.4%, an increase of 2.9 percentage points, indicating growth in production following two months of contraction.
• The Employment Index registered 52.1%, a decrease of 2.6 percentage points.
• The Prices Index registered 55%, reflecting a decrease of 3 percentage points.

Unfortunately, comments from the panel continue to show concern over a fragile global economy and soft orders across several manufacturing sectors. There is another standout issue: only eight of the 18 manufacturing industries showed growth in October. In short, this is not a broad expansion because there were also eight of the 18 industries showing contraction.

These were the eight growth sectors: petroleum and coal products; furniture and related products; apparel, leather and allied products; paper products; miscellaneous manufacturing; food, beverage and tobacco products; plastics and rubber products; and chemical products.

The eight industries reporting contraction in October were as follows: primary metals; wood products; machinery; fabricated metal products; transportation equipment; electrical equipment, appliances and components; computer and electronic products; and nonmetallic mineral products.

JON C. OGG

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