U.S. manufacturing activity at highest levels in 2 yrs
03 November, 2020
U.S. manufacturing posted a strong gain in October to the best level in 2 yrs even as coronavirus cases have begun to surge again in many places.
The Institute for Supply Management, a link of buying managers, said Monday that its manufacturing index rose by 3.9 percentage-points to a reading of 59.3% last month, up from 55.4% in September.
It was the highest level for this closely watched barometer of manufacturing health since September 2018. Any reading above 50 signals that manufacturing is expanding.
The gauge had fallen into recession territory from March through May as a lot of the country shut down in order to contain the coronavirus.
Of the 18 industries covered in the report, 15 reported expansion in October with strong growth in fabricated metals, food and veverages, chemicals and computers and electronics.
Timothy Fiore, chair of the ISM manufacturing survey committee, said that manufacturing had been helped by strong demand coming out of the spring lockups in such areas as home construction and auto sales.
But economists are concerned about the united states heading directly into widespread lockups, since it did in the spring. Many elements of Europe are already doing this as a result of a surging infections.
“Manufacturing rebounded strongly with fewer restrictions on monetary activity and stimulus efforts however the path forward could be more difficult as the economy continues to deal wit the pandemic,” said Gus Faucher, chief economist at PNC Financial. “An inability of Congress to pass further fiscal stimulus is a substantial downside risk.”
The strength in October reflected gains in key areas such as for example employment and inventories, which both moved from contraction to expansion in October. The brand new orders element of the index was also strong, rising to the best level since 2004.
Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said while October was a solid month for manufacturing “the outlook is less positive given renewed virus outbreaks that may disrupt activity and weight on demand."
Source: japantoday.com
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