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PMI rises, but producers see no growth as outlook mixed

Keywords: Tags  Purchasing Managers Index, Institute for Supply Management, PMI, ISM, Bradley Holcomb, metal producers, metal fabricators, new orders backlogs

CHICAGO — The Purchasing Managers Index (PMI) moved up slightly in October to 56.4, indicating continued expansion in the U.S. manufacturing sector.

However, primary metals producers weren’t among the 14 out of 18 manufacturing industries to report growth last month.

"There were mixed responses on whether the government shutdown and potential default have had any effect on October’s (index)," according to Bradley J. Holcomb, chairman of the Institute for Supply Management’s (ISM) Manufacturing Business Survey Committee.

"The government shutting down and threatening to go into a default position is causing all kinds of concerns in our markets," one metals fabricator said.

Hot-rolled pickled and oiled carbon steel sheet prices were reported up vs. September, along with stainless steel and some steel-based products. Fabricators also reported paying more for raw materials.

Fabricators reported an increase in new orders and output.

Fabricators and metals producers continued hiring last month, and both said their order backlogs rose. Fabricators also saw imports increase.

The ISM’s Inventories Index registered 52.5 percent in October, up 2.5 points from September. But metal producers and fabricators lowered their inventories last month.

"Government data on recent months have been barely above mediocre outside of the auto sector," Michael Montgomery and Erik Johnson, economists at Lexington, Mass.-based IHS Global Insight Inc., said.

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