Economic activity in the manufacturing sector expanded in September for the 14th consecutive month, and the overall economy grew for the 17th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "While the headline number shows relative strength this month as the PMI reading of 54.4 percent is still quite positive, the overall picture is less encouraging. The growth of new orders continued to slow, as the index is down significantly from its cyclical high of 65.9 percent (January 2010). Production is currently growing at a faster rate than new orders, but it typically lags and would be expected to weaken further in the fourth quarter. Manufacturing has enjoyed a stronger recovery than other sectors of the economy, but it appears that weaker growth is the expectation for the fourth quarter. Both the Inventories and Backlog of Orders Indexes are sending strong negative signals of weakening performance in the sector."

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 13 are reporting growth in September, in the following order: Apparel, Leather & Allied Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Primary Metals; Miscellaneous Manufacturing; Transportation Equipment; Computer & Electronic Products; Furniture & Related Products; Plastics & Rubber Products; Chemical Products; Paper Products; Machinery; and Food, Beverage & Tobacco Products. The three industries reporting contraction in September are: Wood Products; Printing & Related Support Activities; and Nonmetallic Mineral Products.

WHAT RESPONDENTS ARE SAYING ...

"Business results (top and bottom line) continue to meet or exceed our operating plan and exceed prior year performance by double digits." (Chemical Products)

"Business continues flat relative to prior month and is expected to remain flat. Commodities continue to be the main concern heading into 2011." (Food, Beverage & Tobacco Products)

"Our business is softening due to seasonal considerations. Overall, our situation is much better than 2009." (Machinery)

"Customers seem to be pulling back on orders. I suspect that they are trying to reduce their inventory for the approaching year-end." (Transportation Equipment)

"Strategic customers reducing order quantities." (Computer & Electronic Products)

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