US manufacturing sees April 2011 high despite shutdown
October's ISM manufacturing PMI has come in higher than expected at 56.4, after an analyst consensus of 55.0, and up from September's 56.2. Any number above 50 implies an expansion.
The figure is at its strongest since April 2011 and suggests that the manufacturing sector didn't suffer too much because of shutdown. Continued improvement in overseas activity also contributed. Gold has dropped on the news.
Manufacturing PMI has just dropped from 52.8 to 51.8. A fall to 51.1 was expected, but the headline indicator of order book growth has, nonetheless, dropped to its lowest level since October 2012.
The forward-looking new orders index, was broadly unchanged at 60.6, up marginally from 60.5. Employment (53.2, from 55.4) and production (60.8, from 62.6) fell slightly.
Amna Asaf of Capital Economics says that, in spite of the fall, the production index has been quite strong for several months now. This strength hasn't yet been reflected in actual manufacturing output, however – Markit PMI has remained notably more downbeat.
Overall, at this level, says Asaf, "the ISM manufacturing index points to annualised GDP growth of close to 3.0 per cent in the fourth quarter. We doubt the economy will grow that strongly, but the resilience of this index over the past four months is encouraging, even if it is over-doing the optimism a little."