October PMI Manufacturing comes in lower than consensus, new orders remain sharp

• October PMI Manufacturing Index: 58.4 vs. 59.2 consensus, 60.7 prior; although the overall upturn slowed to the softest in 2021 so far, the expansion in new orders remained sharp and historically elevated.
• The latest improvement in the health of the U.S. manufacturing sector was sharp, despite being the weakest for ten months.
• Output growth eased again to the weakest since July 2020 amid capacity constraints including material shortages.
• Backlogs of work rose markedly, and at one of the sharpest paces on record as firms grappled with pressure on capacity. The rate of growth eased to a four-month low.
• "Around half of all companies reporting lower production in October attributed the decline to a lack of supplies. However, a further one-in-ten cited a lack of labor, and one-in-four reported that demand had fallen, often as a result of customers either lacking other inputs or pushing back on higher prices," Chief Business Economist IHS Markit Chris Williamson commented.