Manufacturing growth expanded slightly in October to reach its highest level since the early stages of the economic recovery, according to an Institute for Supply Management report released today.
September's index grew 0.5 points to 56.2%, and this latest month's index added on another 0.2 points to clock in at 56.4%. The index is based on surveys of purchasing managers, and any reading above 50% indicates that the manufacturing economy is generally expanding, while a reading below 50% indicates that it is generally contracting.
This latest boost took market analysts by surprise. After September's strong gain, analysts had expected a slump back to 55%.
On a component-by-component basis, both new orders (60.6%) and production (60.8%) have maintained above-60% readings for three straight months. Employment hasn't fared quite as well, taking a 2.2 point hit to 53.2% in October. According to the Institute, purchasing managers had mixed feelings on whether the government shutdown and debt default affected October's numbers.
Fourteen of the eighteen reporting manufacturing industries cited business growth, with textile mills leading the improvement. Meanwhile, apparel, leather & allied products, primary metals, and chemical products industries all reported contractions.
The Institute's latest report stands in stark contrast to Markit Economics' Purchasing Managers' Manufacturing Index released earlier today. Rather than increasingly strong growth, Markit's numbers put manufacturing expansion at a 12-month low.