September 2021 Manufacturing ISM Report On Business Indicates Strong Sector Expansion Continues

Author photo: Steve Clouther
By Steve Clouther
Industry Trends

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector grew in September, with the overall economy notching a 16th consecutive month of growth, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing grew in September, as the Manufacturing PMI registered 61.1 percent, 1.2 percentage points higher than the August reading of 59.9 percent, thus continuing to indicate strong sector expansion and U.S. economic growth.

Manufacturing ISM Report

ISM’s New Orders Index registered 66.7 percent in September, unchanged compared to the 66.7 percent reported in August, and this indicates that new orders grew for the 16th consecutive month.

The Production Index registered 59.4 percent in September, 0.6 percentage point lower than the August reading of 60 percent, indicating growth for the 16th consecutive month.

ISM’s Employment Index registered 50.2 percent in September, 1.2 percentage points above the August reading of 49 percent. The Employment Index returned to expansion territory after one month below 50 percent.

The delivery performance of suppliers to manufacturing organizations was slower in September, as the Supplier Deliveries Index registered 73.4 percent, 3.9 percentage points higher than the 69.5 percent reported in August.

The Inventories Index registered 55.6 percent in September, 1.4 percentage points higher than the 54.2 percent reported for August. Manufacturing Inventories are clearly in expansion territory due to companies accepting more raw materials inventory than they may use to reduce production shortages, work-in-process inventory accounts growing due to increasing part shortages, and growth of finished goods inventory as some companies are held back from delivering due to customers’ throughput challenges.

ISM’s Backlog of Orders Index registered 64.8 percent in September, a 3.4-percentage point decrease compared to the 68.2 percent reported in August, indicating order backlogs expanded for the 15th straight month.

The 17 manufacturing industries reporting growth in September — in the following order — are: Furniture & Related Products; Petroleum & Coal Products; Machinery; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Chemical Products; Apparel, Leather & Allied Products; Textile Mills; Paper Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Fabricated Metal Products; Transportation Equipment; Primary Metals; Nonmetallic Mineral Products; and Plastics & Rubber Products. The only industry reporting a decrease in September compared to August is Wood Products.

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