Manufacturing PMI® at 60.8%, October 2021 Manufacturing ISM® Report On Business®

New Orders, Production and Employment Growing; Supplier Deliveries Slowing at Faster Rate; Backlog Growing; Manufacturing Inventories Growing; Customers' Inventories Too Low; Prices Increasing, Exports Growing and Imports Contracting

TEMPE, Ariz., Nov. 1, 2021 /PRNewswire/ -- Economic activity in the manufacturing sector grew in October, with the overall economy achieving a 17th consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM^® Report On Business^®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee:

"The October Manufacturing PMI^® registered 60.8 percent, a decrease of 0.3 percentage point from the September reading of 61.1 percent. This figure indicates expansion in the overall economy for the 17th month in a row after a contraction in April 2020. The New Orders Index registered 59.8 percent, down 6.9 percentage points compared to the September reading of 66.7 percent. The Production Index registered 59.3 percent, a decrease of 0.1 percentage point compared to the September reading of 59.4 percent. The Prices Index registered 85.7 percent, up 4.5 percentage points compared to the September figure of 81.2 percent. The Backlog of Orders Index registered 63.6 percent, 1.2 percentage points lower than the September reading of 64.8 percent. The Employment Index registered 52 percent, 1.8 percentage points higher compared to the September reading of 50.2 percent. The Supplier Deliveries Index registered 75.6 percent, up 2.2 percentage points from the September figure of 73.4 percent. The Inventories Index registered 57 percent, 1.4 percentage points higher than the September reading of 55.6 percent. The New Export Orders Index registered 54.6 percent, an increase of 1.2 percentage points compared to the September reading of 53.4 percent. The Imports Index registered 49.1 percent, a 5.8-percentage point decrease from the September reading of 54.9 percent."

Fiore continues, "Business Survey Committee panelists reported that their companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand. All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products. Global pandemic-related issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential. However, panel sentiment remains strongly optimistic, with four positive growth comments for every cautious comment. Panelists are fully focused on supply chain issues in order to respond to the ongoing high levels of demand. Demand expanded, with the (1) New Orders Index growing, supported by continued expansion of the New Export Orders Index, (2) Customers' Inventories Index remaining at very low levels, and (3) Backlog of Orders Index staying at a very high level. Consumption (measured by the Production and Employment indexes) grew during the period, with a combined 1.7-percentage point increase to the Manufacturing PMI^® calculation. Although the Employment Index expanded for a second month, hiring difficulties at panelists' companies show no significant signs of abating. Inputs — expressed as supplier deliveries, inventories, and imports — continued to help constrain production expansion, especially with a contraction in imports, compared to September. The Supplier Deliveries Index slowed, while the Inventories Index continued to expand faster due to (1) work-in-process inventory held longer due to key part shortages and (2) more finished goods inventory held due to downstream customer issues. The Prices Index expanded for the 17th consecutive month, at a faster rate in October, indicating continued supplier pricing power and scarcity of supply chain goods.

"All of the six biggest manufacturing industries — Food, Beverage & Tobacco Products; Computer & Electronic Products; Chemical Products; Fabricated Metal Products; Petroleum & Coal Products; and Transportation Equipment, in that order — registered moderate to strong growth in October.

"Manufacturing performed well for the 17th straight month, with demand and consumption registering month-over-month growth, in spite of continuing unprecedented obstacles (including the Imports Index moving into contraction territory) and ever-increasing demand. Meeting demand remains a challenge, due to hiring difficulties and a clear cycle of labor turnover: As workers opt for more attractive job opportunities, panelists' companies and their suppliers struggle to maintain employment levels. Disruptions from COVID-19, primarily in Southeast Asia, continue to have an impact on many industry sectors. Congestion at ports in China and the U.S. continues to be a headwind, as transportation networks remain stressed. Demand remains at strong levels, despite increasing prices," says Fiore.

The 16 manufacturing industries reporting growth in October — in the following order — are: Apparel, Leather & Allied Products; Furniture & Related Products; Textile Mills; Electrical Equipment, Appliances & Components; Machinery; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Computer & Electronic Products; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; Petroleum & Coal Products; Plastics & Rubber Products; Paper Products; Primary Metals; and Transportation Equipment. The two industries reporting a decrease in October compared to September are Wood Products; and Nonmetallic Mineral Products.

WHAT RESPONDENTS ARE SAYING

• "Global supply chain issues continue. Getting anything from China is near impossible — extreme delays. Microchip and circuit breaker shortages continue and are expected to continue into 2022." [Computer & Electronic Products]
• "Business is getting stronger, but the supply chain is getting worse every day." [Chemical Products]
• "Strong sales continue; however, we have diverted chips (semiconductors) to our higher-margin vehicles and stopped or limited the lower-margin vehicle production schedules." [Transportation Equipment]
• "Import costs and delays hurting business requiring more safety stock for uncertainty. Rolling blackouts in China starting to hurt shipments even more." [Food, Beverage & Tobacco Products]
• "Domestic original equipment manufacturer (OEM) capital-expenditure spending is trending up for our business. We are seeing an increase of capital equipment with life spans of more than 10 years in the fourth quarter." [Fabricated Metal Products]
• "Demand continues to be strong, but we continue to be held back by supply chain issues — logistics delays, as well as capacity and labor issues at suppliers." [Electrical Equipment, Appliances & Components]
• "Business remains strong, with brisk incoming orders. We have become much more supply driven versus demand driven, due to shortages of labor, materials and freight. Costs continue to increase on all fronts, and we are considering our third price increase of the year for our customers." [Furniture & Related Products]
• "Customer demand remains high. COVID-19 related supply chain issues still hamper our ability to meet demand. Labor is still difficult for our suppliers to obtain, and labor costs are rising." [Machinery]
• "Demand for our products remains strong, but we continue to struggle to secure enough raw material to keep our manufacturing lines running." [Miscellaneous Manufacturing]
• "My prediction is that 2022 will be very similar to 2021 — similar demand, constrained supply, restricted logistics and rampant inflation." [Plastics & Rubber Products]

Manufacturing ISM^® Report On Business^® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price
Adhesives (4); Aluminum (17); Aluminum Products (7); Caustic Soda (5); Copper (2); Copper-Based Products; Corn; Corrugate (13); Corrugated Packaging (12); Crude Oil; Diesel Fuel (10); Electrical Components (11); Electronic Components (11); Foam (2); Freight (12); Isocyanate; Labor — Temporary (6); Logistics Services (2); Maintenance, Repair, and Operations (MRO) Supplies (2); Motors; Natural Gas (4); Nylon; Ocean Freight (11);  Packaging Supplies (11); Pallets (4); Paper (2); Phosphates; Plastic Containers (2); Plastic Resins (14); Polyester Resin; Polyethylene (9); Polyethylene Terephthalate (PET); Polypropylene (16); Polyvinyl Chloride (PVC); Printed Circuit Board Assemblies (PCBAs); Printed Circuit Boards (PCBs); Resin-Based Products (9); Rubber-Based Products (3); Semiconductors (9); Steel (15); Steel — Bars; Steel — Carbon (11); Steel — Cold Rolled (3); Steel — Drums (2); Steel — Hot Rolled (14); Steel — Stainless (12); Steel Products (14); and Tin Products.

Commodities Down in Price
Wood (3).

Commodities in Short Supply
Adhesives and Paints (4); Caustic Soda; Corrugated Packaging (4); Electrical Components (13); Electronic Components (11); Foam; Freight (2); Labor — Temporary (6); Ocean Freight (7); Ocean Freight Containers; Packaging Supplies; Pallets; Phosphates; Plastic Containers (2); Plastic Products (9); Plastic Resins — Other (8); Polyvinyl Chloride (PVC) (2); Printed Circuit Board Assemblies (PCBAs) (3); Rubber-Based Products (3); Semiconductors (11); Silane; Silicon; Steel (11); Steel — Hot Rolled (12); Steel — Stainless (8); and Steel Products (9).

Note: The number of consecutive months the commodity is listed is indicated after each item.

OCTOBER 2021 MANUFACTURING INDEX SUMMARIES

Manufacturing PMI^®
Manufacturing grew in October, as the Manufacturing PMI^® registered 60.8 percent, 0.3 percentage point lower than the September reading of 61.1 percent. "The Manufacturing PMI^® continued to indicate strong sector expansion and U.S. economic growth in October. All five subindexes that directly factor into the Manufacturing PMI^® were in growth territory. All of the six biggest manufacturing industries expanded, in the following order: Food, Beverage & Tobacco Products; Computer & Electronic Products; Chemical Products; Fabricated Metal Products; Petroleum & Coal Products; and Transportation Equipment. The New Orders and Production indexes remained at strong levels. The Supplier Deliveries Index continued to reflect suppliers' difficulties in maintaining delivery rates, due to persistent direct-labor and transportation challenges. Nine of the 10 subindexes were positive for the period; a reading of 'too low' for the Customers' Inventories Index is considered a positive for future production," says Fiore. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI^® above 43.1 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the October Manufacturing PMI^® indicates the overall economy grew in October for the 17th consecutive month following contraction in April 2020. "The past relationship between the Manufacturing PMI^® and the overall economy indicates that the Manufacturing PMI^® for October (60.8 percent) corresponds to a 5-percent increase in real gross domestic product (GDP) on an annualized basis," says Fiore.

THE LAST 12 MONTHS

New Orders
ISM^®'s New Orders Index registered 59.8 percent in October, a decrease of 6.9 percentage points compared to the 66.7 percent reported in September. This indicates that new orders grew for the 17th consecutive month. "All of the six largest manufacturing sectors — Chemical Products; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Computer & Electronic Products; Fabricated Metal Products; and Transportation Equipment, in that order — expanded at moderate to strong levels," says Fiore. A New Orders Index above 52.8 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

Fourteen of 18 manufacturing industries reported growth in new orders in October, in the following order: Apparel, Leather & Allied Products; Furniture & Related Products; Printing & Related Support Activities; Textile Mills; Primary Metals; Chemical Products; Food, Beverage & Tobacco Products; Machinery; Petroleum & Coal Products; Miscellaneous Manufacturing; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Transportation Equipment. The two industries reporting a decline in new orders in October are Nonmetallic Mineral Products; and Plastics & Rubber Products.

Production
The Production Index registered 59.3 percent in October, 0.1 percentage point lower than the September reading of 59.4 percent, indicating growth for the 17th consecutive month. "All of the top six industries — Petroleum & Coal Products; Fabricated Metal Products; Chemical Products; Computer & Electronic Products; Transportation Equipment; and Food, Beverage & and Tobacco Products, in that order — expanded at strong to moderate levels. Raw materials continued to be a constraint to production growth, as manufacturing inventories continued to expand. Staffing levels on the factory floor remain an obstacle, with direct-labor turnover and retirements continuing a negative trend," says Fiore. An index above 52.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.

The 10 industries reporting growth in production during the month of October — listed in order — are: Petroleum & Coal Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Machinery; Fabricated Metal Products; Chemical Products; Computer & Electronic Products; Miscellaneous Manufacturing; Transportation Equipment; and Food, Beverage & Tobacco Products. The four industries reporting a decrease in October are: Printing & Related Support Activities; Wood Products; Primary Metals; and Plastics & Rubber Products.

Employment
ISM^®'s Employment Index registered 52 percent in October, 1.8 percentage points above the September reading of 50.2 percent. "The Employment Index reported a second month of expansion. Of the six big manufacturing sectors, three (Computer & Electronic Products; Fabricated Metal Products; and Chemical Products) expanded. Survey panelists' companies are still struggling to meet labor-management plans, but for a second month, there were modest signs of progress: An increasing percentage of comments noted improvements regarding employment, compared to less than 5 percent in September. An overwhelming majority of panelists indicate their companies are hiring or attempting to hire — 90 percent of Employment Index comments were about seeking additional staffing. Twenty-eight percent of those respondents expressed difficulty in filling positions, a decrease from September. The increasing frequency of comments on turnover rates and retirements in October continued a trend that began in August," says Fiore. An Employment Index above 50.6 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of 18 manufacturing industries, the 11 industries reporting employment growth in October — in the following order — are: Apparel, Leather & Allied Products; Textile Mills; Electrical Equipment, Appliances & Components; Furniture & Related Products; Printing & Related Support Activities; Plastics & Rubber Products; Machinery; Computer & Electronic Products; Fabricated Metal Products; Chemical Products; and Miscellaneous Manufacturing. The six industries reporting a decrease in employment in October — listed in order — are: Wood Products; Nonmetallic Mineral Products; Petroleum & Coal Products; Paper Products; Food, Beverage & Tobacco Products; and Transportation Equipment.

Supplier Deliveries^†
The delivery performance of suppliers to manufacturing organizations was slower in October, as the Supplier Deliveries Index registered 75.6 percent, 2.2 percentage points higher than the 73.4 percent reported in September. All six top manufacturing industries — Food, Beverage & Tobacco Products; Fabricated Metal Products; Computer & Electronic Products; Transportation Equipment; Chemical Products; and Petroleum & Coal Products, in that order — reported slowing deliveries. "Deliveries slowed at a faster rate compared to the previous month. The index continues to reflect suppliers' difficulties in meeting panelist companies' demand, including (1) ongoing supplier hiring challenges, (2) extended raw materials lead times for all tiers, (3) increasing levels of input material shortages, (4) stubbornly high prices and (5) inconsistent transportation availability. The peak has not been seen yet," says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

All 18 industries reported slower supplier deliveries in October, in the following order: Apparel, Leather & Allied Products; Furniture & Related Products; Paper Products; Machinery; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Printing & Related Support Activities; Textile Mills; Transportation Equipment; Chemical Products; Wood Products; Petroleum & Coal Products; and Primary Metals. No industries reported faster supplier deliveries in October.

Inventories
The Inventories Index registered 57 percent in October, 1.4 percentage points higher than the 55.6 percent reported for September. "Manufacturing inventories continued to expand due to panelists' companies stocking more raw materials in hopes of avoiding production shortages, as well as growth in work-in-process and finished-goods inventories," says Fiore. An Inventories Index greater than 44.5 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The 14 industries reporting higher inventories in October — in the following order — are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Textile Mills; Electrical Equipment, Appliances & Components; Furniture & Related Products; Plastics & Rubber Products; Machinery; Food, Beverage & Tobacco Products; Computer & Electronic Products; Paper Products; Miscellaneous Manufacturing; Primary Metals; Chemical Products; and Fabricated Metal Products. The two industries reporting a decrease in inventories in October are Wood Products; and Nonmetallic Mineral Products.

Customers' Inventories^†
ISM^®'s Customers' Inventories Index registered 31.7 percent in October, the same reading from the 31.7 percent reported for September, indicating that customers' inventory levels were considered too low. "Customers' inventories are too low for the 61st consecutive month, a positive for future production growth. For 15 straight months, the Customers' Inventories Index has been at historically low levels," says Fiore.

No industries reported higher customers' inventories in October. The 15 industries reporting customers' inventories as too low during October — listed in order — are: Nonmetallic Mineral Products; Paper Products; Primary Metals; Machinery; Wood Products; Textile Mills; Plastics & Rubber Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Furniture & Related Products; Computer & Electronic Products; and Transportation Equipment.

Prices^†
The ISM^® Prices Index registered 85.7 percent, an increase of 4.5 percentage points compared to the September reading of 81.2 percent, indicating raw materials prices increased for the 17th consecutive month, at a faster rate in October. This is the 14th month in a row that the index has been above 60 percent and the 11th straight month it has exceeded 70 percent. "Aluminum, basic chemicals, copper, corrugate and packaging materials, electronic components, energy, some plastics and plastic products, freight, and steels continue to remain at elevated prices due to product scarcity," says Fiore. A Prices Index above 52.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

In October, all 18 industries reported paying increased prices for raw materials, in the following order: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Paper Products; Printing & Related Support Activities; Textile Mills; Furniture & Related Products; Machinery; Petroleum & Coal Products; Chemical Products; Computer & Electronic Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Primary Metals; Fabricated Metal Products; Transportation Equipment; Food, Beverage & Tobacco Products; and Wood Products.

Backlog of Orders^†
ISM^®'s Backlog of Orders Index registered 63.6 percent in October, a 1.2-percentage point decrease compared to the 64.8 percent reported in September, indicating order backlogs expanded for the 16th straight month. This is the ninth consecutive month with a reading above 60 percent. "Backlogs expanded at a lower rate in October compared to September, indicating production was able to keep up with continuing strong new order levels. However, backlogs remain at historically high levels. Of the six big industry sectors, five (Chemical Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Fabricated Metal Products; and Transportation Equipment) reported that backlogs expanded strongly," says Fiore.

The 15 industries reporting growth in order backlogs in October, in the following order, are: Apparel, Leather & Allied Products; Textile Mills; Paper Products; Machinery; Furniture & Related Products; Wood Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Fabricated Metal Products; Plastics & Rubber Products; Primary Metals; and Transportation Equipment. The only industry reporting lower backlogs in October is Nonmetallic Mineral Products.

New Export Orders^†
ISM^®'s New Export Orders Index registered 54.6 percent in October, up 1.2 percentage points compared to the September reading of 53.4 percent. "The New Export Orders Index grew for the 16th consecutive month, at a faster rate compared to September. Of the six big industry sectors, five (Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Chemical Products; and Transportation Equipment) expanded. New export orders were a contributor to the New Orders Index continuing in strong expansion territory," says Fiore.

The 10 industries reporting growth in new export orders in October — in the following order — are: Furniture & Related Products; Paper Products; Primary Metals; Miscellaneous Manufacturing; Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Machinery; Chemical Products; and Transportation Equipment. The only industry reporting a decrease in new export orders in October is Plastics & Rubber Products.

Imports^†
ISM^®'s Imports Index registered 49.1 percent in October, a decrease of 5.8 percentage points compared to September's figure of 54.9 percent. "Imports contracted in October after 15 consecutive months of expansion, reflecting continuing challenges with throughput at U.S. ports of entry. Overland-transport challenges and container shortages continue to persist across the global supply chain, causing instability with import level projections. Imports will continue to be challenged through the end of 2021 and likely through the first half of 2022," says Fiore.

The five industries reporting growth in imports in October are: Textile Mills; Chemical Products; Furniture & Related Products; Food, Beverage & Tobacco Products; and Fabricated Metal Products. The eight industries reporting a decrease in imports in October — in the following order — are: Wood Products; Nonmetallic Mineral Products; Paper Products; Primary Metals; Plastics & Rubber Products; Transportation Equipment; Computer & Electronic Products; and Machinery.

^†The Supplier Deliveries, Customers' Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy
Average commitment lead time for Capital Expenditures in October was 156 days, an increase of two days compared to September. Average lead times in October for both Production Materials and Maintenance, Repair and Operating (MRO) Supplies were the longest since ISM^® began collecting this data in 1987, breaking previous records set in September. Average lead time for Production Materials was 96 days, an increase of four days, and average lead time for MRO Supplies was 49 days, up four days compared to the previous month.

About This Report
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of October 2021.

The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM^® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation
The Manufacturing ISM^® Report On Business^® is based on data compiled from purchasing and supply executives nationwide. The composition of the Manufacturing Business Survey Committee is stratified according to the North American Industry Classification System (NAICS) and each of the following NAICS-based industry's contribution to gross domestic product (GDP): Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies). The data are weighted based on each industry's contribution to GDP. According to the BEA estimates for 2018 GDP (released October 29, 2019), the six largest manufacturing subsectors are: Computer & Electronic Products; Chemical Products; Transportation Equipment Manufacturing; Food, Beverage & Tobacco Products; Petroleum & Coal Products; and Fabricated Metal Products. Beginning in February 2018 with January 2018 data, computation of the indexes is accomplished utilizing unrounded numbers.

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (Manufacturing PMI^®, New Orders, Production, Employment and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The Manufacturing PMI^® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), and Inventories.

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Manufacturing PMI^® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A Manufacturing PMI^® above 43.1 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.1 percent, it is generally declining. The distance from 50 percent or 43.1 percent is indicative of the extent of the expansion or decline. With some of the indicators within this report, ISM^® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM^® Report On Business^® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to report on information for the current month for U.S. operations only. ISM^® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM^® then compiles the report for release on the first business day of the following month.

The industries reporting growth, as indicated in the Manufacturing ISM^® Report On Business^® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern.

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About Institute for Supply Management^®
Institute for Supply Management^® (ISM^®) serves supply management professionals in more than 90 countries. Its 50,000 members around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM leads the profession through the ISM Report On Business^®, its highly regarded certification programs and the ISM Advance™ Digital Platform. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM^® Report On Business^® is posted on ISM^®'s website at www.ismrob.org on the first business day* of every month after 10:00 a.m. ET.

The next Manufacturing ISM^® Report On Business^® featuring November 2021 data will be released at 10:00 a.m. ET on Wednesday, December 1, 2021.

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SOURCE Institute for Supply Management

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