NEW YORK: Strong conditions in manufacturing in September lifted a closely-watched US economic benchmark to a 13-year high Monday, although some sectors expressed worries about rising supply costs due to hurricanes.
The purchasing managers survey showed a September reading of 60.8 percent, an increase of two percentage points and the highest reading since May 2004, the Institute for Supply Management (ISM) said Monday.
The report bested the 57.8 percent expected by analysts. A reading of 50 separates growth from retraction.
The report showed especially strong performance in new orders and production. Seventeen of 18 manufacturing sectors reported growth, including transportation equipment, chemicals and electrical equipment. Only furniture and related products reported a decline from August.
Analysts said the data along with other strong employment reports further bolsters the odds of a December Federal Reserve interest rate increase.
“The hurricanes appear not to have made a material difference to activity at the national level, though the press release cites businesses in several sectors fretting about potential supply chain disruptions and higher prices,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
“For now, though, this is a very strong report.”
Manufacturers reported a jump in prices from 62 percent to 71.5 percent.
“Business is strong,” said a plastics and rubber products company quoted by ISM. “However, we are concerned about price increases due to the hurricanes.”
“Hurricanes Harvey and Irma will have significant impact on input costs,” said a food and beverage and tobacco products company. “Disruption in supply chain. Concerns about transportation.”