The Purchasing Managers’ Index (PMI, by its acronym in English) of the United States fell in October to 54.9 points from 55.9 recorded in September, although it remained above the 50-point threshold that separates expansion from contraction. All of this takes place in a scenario marked by rising input costs and persistent problems in supply chains, according to S&P Global this Monday.
In particular, the U.S. manufacturing industry continued to show solid expansion in October, albeit with a slight moderation in the pace. Production and new orders continued to rise, although obstacles remained such as the increase in input costs, whose inflation reached its highest level since May and stood clearly above the recent average.
Despite this, companies maintained a sufficient level of confidence about future developments to increase their staff notably, so that employment posted its largest advance since April 2021.
The momentum of production and new orders continued to underpin the sector’s expansion, although both indicators, like the overall PMI, showed more moderate growth rates than in September. Production recorded its seventeenth consecutive month of gains, closely tied to the rebound in the order book.
In the price section, input cost inflation accelerated sharply in September to stand at its highest level since the nearly four-year peak reached in May. Manufacturers indicated that spending on energy, fuel and transport rose again compared with September and became decisive factors in the generalized increase in prices charged by suppliers.
Tariffs likewise added upward pressure on costs, as did the rising cost of metals such as aluminum.
Looking ahead to the next twelve months, manufacturers expect an increase in production levels, while overall optimism has improved compared with September and is around its historical pattern. Companies have pointed to favorable plans for business growth and trust in a reactivation of demand, despite the challenges arising from tariffs and international economic uncertainty.
The chief business economist at S&P Global Market Intelligence, Chris Williamson, has pointed out that US factories continued to experience strong expansion in October, maintaining the sector’s best period of growth since early 2022, and has emphasized that the recovery is also boosting job creation at a pace not seen in five and a half years.
Nevertheless, the analyst warns that the problems associated with growth itself are evident, as factories are finding it difficult to meet very strong demand, especially for goods and equipment linked to artificial intelligence, in an environment of disruptions in supply chains.