- Prelim was 47.8
- Prior was 47.3
- Fourth straight month below the 50.0 expansion mark
- Election uncertainty weighing on new orders, the report says
- Hurricane disruptions hitting supply chains
- Input cost inflation at lowest since November 2023
Comments from S&P Global’s Chris Williamson highlight particular weakness in investment goods orders. He notes potential upside after election uncertainty clears, but warns of ongoing headwinds from international conflicts.
“The US manufacturing downturn extended into
its fourth successive month in October, marking
a disappointing start to the fourth quarter for the
goods-producing sector. Although the rate of decline
moderated, order books continued to deteriorate at a
worryingly steep pace, and a further build-up of unsold
stock hints at further production cuts at factories in the
coming months unless demand revives.
“The survey does, however, provide some
encouragement that the current soft patch could prove
short-lived. Hurricanes have been blamed for supply
disruptions, which should therefore ease in November,
and manufacturers are feeling more positive about the
outlook than at any time since May, hoping that demand
will pick up once the uncertainty generated by the
Presidential Election clears.
“It’s notable that orders for investment goods such as
plant and machinery have fallen especially sharply in
recent months. Headcounts have also been cut for a
third straight month, underscoring the reluctance among
firms to expand in the face of heightened geopolitical
uncertainty, with firms citing tensions around the
US election as well as intensifying international
conflicts. There is therefore some potential upside to
the manufacturing sector if the political environment
becomes more conducive to spending and investment
after the election.”
This article was written by Adam Button at www.forexlive.com.
