The ISM index fell by 2.3 percentage points compared to September, and fell to 46.7%. Analysts expected a slight improvement to 49.2%.
Manufacturing activity in the United States continued to deteriorate in October, contracting for the twelfth month in a row, falling further compared to September, according to data published Wednesday by the professional federation ISM.
The index measuring this activity fell by 2.3 percentage points compared to September, and fell to 46.7%.
This disappointed analysts, who anticipated a slightly weaker contraction than the previous month, and saw the index recovering a little, to 49.2%, according to the Market Watch consensus.
Activity has been declining in the manufacturing sector since November 2022, the index then fell below the 50% mark. When the index is above this level, activity, on the contrary, is growing.
“Orders remain low,” Timothy Fiore, head of the survey, was quoted as saying in a statement.
Among the six major manufacturing industries, only food, beverage and tobacco production were growing last month.
The consumption of American households, in fact, although it remains sustained, has largely turned towards services.
Because the rate increases carried out by the American central bank (Fed) since March 2022, in order to slow down economic activity and therefore curb high inflation, have pushed households to buy fewer goods.
The Fed could announce on Wednesday that it will maintain rates at their current level.
“The manufacturing sector is facing challenges from rising borrowing costs and tighter credit conditions,” commented Rubeela Farooqi, chief economist at High Frequency Economics.
But “a relocation of supply networks and investments in national production capacities could support the activity of factories in the long term”, the situation could improve in the medium term, she underlines.
Joe Biden’s administration has, in fact, put in place incentives and directed investments in favor of production in the United States, in particular, of semiconductors, electric car batteries, and even solar panels.
2023-11-01 15:22:57
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