The latest data from the Institute for Supply Management (ISM) indicates a decrease in the U.S. Manufacturing Purchasing Managers' Index (PMI) for October, dropping to 46.5 from 47.2 in September. This marks the lowest level since July 2023, suggesting a contraction in the manufacturing sector, which contributes 10.3% to the overall economy. A PMI below 50 denotes a decline.
The downturn in October's PMI may be attributed to the workers' strike at Boeing, as the company halted production of its 737 MAX, 767, and 777 wide-body planes, leading to a slump in industrial output in September due to labor disputes. This is the seventh consecutive month that the PMI has remained below the threshold of 50.
Despite the overall decline, the forward-looking new orders index within the ISM survey increased slightly to 47.1 from 46.1 in September. However, production continued to shrink, likely due to the cascading effects of the Boeing strike on its suppliers, with the production index falling to 46.2 from 49.8 in September.
