U.S. Manufacturing Hits Lowest Point in 2024

U.S. manufacturing activity contracted in October, dropping to its lowest level of the year, according to the Institute for Supply Management (ISM). The Manufacturing Purchasing Managers’ Index (PMI) for October registered 46.5 percent, a decline of 0.7 percentage points from September’s figure of 47.2 percent. A PMI below 50 percent indicates contraction in the sector.

Weak Demand and Declining Output
The October report highlights weak demand and declining production as key factors behind the drop. The New Orders Index, a critical indicator of future manufacturing activity, remained in contraction territory, registering 47.1 percent—slightly higher than the 46.1 percent recorded in September. However, this still signals a slowdown in new orders.

The Production Index took a sharper hit, falling to 46.2 percent, a drop of 3.6 percentage points from the previous month. Meanwhile, the Employment Index saw a modest improvement, rising to 44.4 percent from 43.9 percent in September, though still firmly in contraction.

Fabricated Metal Products Among Affected Industries
Several manufacturing sectors reported contraction in October, including fabricated metal products, primary metals, transportation equipment, appliances, components, and machinery. The weakness in these industries reflects broader challenges facing U.S. manufacturing, including reduced output and limited demand.

Timothy Fiore, chair of the ISM’s Manufacturing Business Survey Committee, stated, “U.S. manufacturing activity contracted again in October, and at a faster rate compared to last month. Demand continues to be weak, output declined, and inputs stayed accommodative.”