The overall economy grew for the 101st straight time, the Institute for Supply Management reported Wednesday. Suppliers reported dealing with post-hurricane issues with supplies and cost.
According to the ISM's monthly report on business, the ISM index decreased to 58.7 in October from 60.8 in September.
Economists polled by Thomson Reuters predicted the index would be 59.5.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
The prices paid index slid to 68.5 from 71.5. The employment index fell to 59.8 from 60.3.
The production index dropped to 61.0 from 62.2, the new orders index declined to 63.4 from 64.6; the supplier deliveries index decreased to 61.4 from 64.4; the export orders index fell to 56.5 from 57.0; and the imports index stayed at 54.0.
The inventories index dropped to 48.0 from 52.5; the customers' inventories index rose to 43.5 from 42.0; and backlog of orders increased to 58.0 from 58.0.
Respondents' comments included:
- “Raw material costs on the rise, but purchasing operation has navigated shortages caused by hurricanes.” (Chemical Products)
- “Incoming orders are strong, mainly due to recovery efforts in the wake of Hurricanes Harvey and Irma. Backlogs are up due to operating inefficiencies.” (Machinery)
- “Hurricanes have caused shortages in the resin market, resulting in price increases, inventory constraints and increased lead times.” (Computer & Electronic Products)
- “Ongoing market growth. Minimal impact expected from hurricanes so far in this season.” (Miscellaneous Manufacturing)
- “Business seems to be a bit depressed due to the storms last month, but is picking back up.” (Fabricated Metal Products)
- “Business continues to be better than expected.” (Transportation Equipment)
- “Business is good. Supplier deliveries have extended. Things are really picking up.” (Food, Beverage & Tobacco Products)
- “Our plants are sold out for 2017 — we can’t take any new orders.” (Nonmetallic Mineral Products)
- “In plastics processing, Hurricane Harvey is the reason for every price increase being announced and virtually all suppliers are announcing price increases.” (Plastics & Rubber Products)