- Prelim was 47.8
- Prior was 47.3
- Fourth straight month below the 50.0 expansion mark
- Election uncertainty weighing on new orders, the report says
- Hurricane disruptions hitting supply chains
- Input cost inflation at lowest since November 2023
Comments from S&P Global's Chris Williamson highlight particular weakness in investment goods orders. He notes potential upside after election uncertainty clears, but warns of ongoing headwinds from international conflicts.
“The US manufacturing downturn extended into its fourth successive month in October, marking a disappointing start to the fourth quarter for the goods-producing sector. Although the rate of decline moderated, order books continued to deteriorate at a worryingly steep pace, and a further build-up of unsold stock hints at further production cuts at factories in the coming months unless demand revives.
“The survey does, however, provide some encouragement that the current soft patch could prove short-lived. Hurricanes have been blamed for supply disruptions, which should therefore ease in November, and manufacturers are feeling more positive about the outlook than at any time since May, hoping that demand will pick up once the uncertainty generated by the Presidential Election clears.
“It’s notable that orders for investment goods such as plant and machinery have fallen especially sharply in recent months. Headcounts have also been cut for a third straight month, underscoring the reluctance among firms to expand in the face of heightened geopolitical uncertainty, with firms citing tensions around the US election as well as intensifying international conflicts. There is therefore some potential upside to the manufacturing sector if the political environment becomes more conducive to spending and investment after the election.”
