New York (awp / dpa) – Growth in manufacturing activity in the Chicago area slowed in September, hitting a low since February, according to the ISM index released Thursday.
The index fell to 64.7 points, 2.1 points less than in August, according to the purchasing managers index of the ISM federation.
Analysts expected 65.0 points.
Activity grows when the index is above 50 points and contracts when it is below.
The index is now moving 10.5 points below its high for the year, reached in May, when it climbed to a peak in nearly 37 years.
“Among the five main indicators, the order books experienced the most significant decline, followed by supplier deliveries and new orders”, details the ISM in its press release.
“Only the indicator on employment increased during the month,” adds the federation.
Order books fell by more than 20 points, falling to a level not observed for six months (61.1 points), mainly due to supply difficulties weighing on the production capacities of companies.
Port congestion and the slowdown in rail and air traffic affected suppliers’ deliveries, which fell by 11.6 points to 81.2 points.
Raw material shortages and low inventories of critical components, such as semiconductors, contributed to the slowdown in new orders (64.4 points, down 3.4 points).
Production costs have fallen to their lowest in four months (90.7 points, down 3.2 points), but many companies continue to believe that the prices are too high.
In contrast, employment climbed to 52.4 points (+4.1 points), its highest level since April.
For Rubeela Farooqi, chief economist for High Frequency Economics, this index “is extremely volatile”.
“Other regional surveys for the month of September also showed a clear overall slowdown, which suggests a slight contraction of the ISM in September,” she continues.
“In general, the manufacturing sector is growing, but its momentum is hampered by bottlenecks in logistics flows and shortages,” concludes Ms. Farooqi.
af / jh
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