ISM Manufacturing Index Slows in September

Composite activity slowed but nevertheless remained solid for the ISM manufacturing sample where the headline index fell 2.4 points to 56.6. The Econoday consensus was calling for 58.0. Growth in new orders slowed noticeably, down 6.7 points from August, but is still very strong at a reading of 60.0. Backlog orders, however, fell into contraction, down 5.5 points to 47.0. A plus in the report is a fractional uptick in production to 64.6, the likely result of working down backlog.

Other readings include slowing in employment, down 3.5 points to 54.6, and slight acceleration in prices paid, up 1.5 points to a 59.5 level that is moderate for this reading.

The solid rate of production is an important plus in this report that points to a solid gain for the manufacturing component of the industrial production report. Otherwise, this report points to softening during September but from very strong levels.

The composite index from the ISM manufacturing survey in August jumped to 59.0 from 57.1 in July. New orders headlined August's strength, rising to an exceptional 66.7 versus an already very strong 63.4 in July. Production was at 64.5, versus July 61.2 with employment steady and strong at 58.1 versus 58.2.