The ISM’s (Institute for Supply Management) latest survey report on the manufacturing sector shows industry held on to growth in production despite a drop in demand for manufactured goods.
Of the three main indexes used to calculate the PMI, production rose slightly while the two others — new orders and employment — dropped. The production index, meanwhile, rose by one-fifth of a percentage point to 50.6%, sustaining its 28-month growth streak alongside the main index. The ISM’s new orders index fell from 51.3% to 47.1%, returning to contraction after one month of growth in August, and the employment index fell 5.5 points to 48.7%.
Several respondents to the survey reported improving but sharply uneven supply availability, particularly affecting electrical and electronic components. The ISM listed electrical and electronic components as up in price for 22 months straight as of September. Electronic components and semiconductors have also been in short supply for 22 months, while electrical components have been in short supply for two straight years.
Two survey respondents specifically noted the unevenness of electrical parts. One, from a computers and electronic products company, blamed “capacity and skilled labor shortages” for “supply chain issues for all electronic components and custom build-to-print materials.” Another, from an executive at an electrical equipment or appliances company, said simply, “electrical and wiring components continue to cause significant issues,” and that their company “cannot run as consistently as we would like.”
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