CHICAGO Economic activity in the U.S. manufacturing
sector expanded in October for the second consecutive month,
with the Institute for Supply Management (ISM) purchasing
managers index inching up one-fifth of a point to 51.7
The improvement was
sparked by growth in new orders and production, which more than
offset declining employment, inventories, prices, backlogs and
"Comments from the panel (of survey respondents) reflect
continued concern over a fragile global economy and soft orders
across several manufacturing sectors," said ISM manufacturing
business survey committee chairman Bradley J. Holcomb.
Although the new orders index rose 1.9 percentage points
from September to its highest level since May, primary metal
producers reported a contraction in new orders. "Sales and
order intake have slowed," one metal producer said.
Aluminum and stainless steel prices rose last month, survey
respondents said, but scrap and carbon steel prices fell.
Metal producers reported paying lower prices
in October, while prices for fabricators purchases were
Metal producers lowered output from a month earlier, while
fabricators new orders and output remained steady.
However, metal producers increased employment in October, while
fabricators saw a decrease. Both sectors
reduced inventories, and both said their customers
inventories were too high.
Both metal manufacturers and fabricators said that their
backlogs declined from September. Fabricators reported growth
in export orders and imports, while producers said exports and
imports both fell.
"Manufacturing continues to hold up better in the United
States than in the rest of the world," Nigel Gault, chief U.S.
economist for Lexington, Mass.-based IHS Global Insight, said.
"The (ISM) report was not wholly positiveorder backlogs
are still falling very sharplybut the improvement in
domestic orders was another step in the right direction.
Further improvements in housing and consumer spending are