ISM Survey Says Manufacturing In America Is The Greatest In 13 Years

Following modest drops in UK and EU PMIs (and a mixed picture in China), Markit's US Manufacturing PMI inched higher in September amid schizophrenic collapse in output growth (14mo lows) and surge in employment (9mo highs). ISM, on the other hand, reported that US Manufacturing has not been this awesome since June 2004.

Prices Paid are soaring helping Make Manufacturing in America Great Again


As New Orders jump (but remain well below early 2017 highs...


The surge in prices paid and deliveries stand out...


Just one thing... we have seen these odd outlier spikes in ISM before... right after mega storms...

And they did not end well.

As a reminder, ISM and Markit have seen very different views of the US Manufacturing 'recovery' in recent months, as 'real' economic data has actually collapsed...

While ISM headline seems awesome, at least half of the respondents mentioned problems associated with the hurricanes...

  • "Hurricanes causing supply chain and pricing issues." (Chemical Products)
  • "Business levels continue [to be] strong; usually by now, a seasonal downturn begins." (Machinery)
  • "Energy sector (oil and gas) continues to be strong. Price of oil appears to be beginning to stabilize." (Computer & Electronic Products)
  • "We’ve had a very good year and we are forecasting continued strong demand for our product in 2018." (Miscellaneous Manufacturing)
  • "Business is strong. However, we are concerned about price increases due to the hurricanes." (Plastics & Rubber Products)
  • "We are closely watching the Houston events as many of our production chemicals are produced in the Gulf region. Some tightening of supply and/or price increases expected." (Paper Products)
  • "Labor shortages continue to haunt operational capacity both at [the] local plant [level] and up and down the supply chain."(Transportation Equipment)
  • "Hurricanes Harvey and Irma will have significant effects on input costs. Disruption in supply chain. Concerns of transportation." (Food, Beverage & Tobacco Products)
  • "Hurricane Harvey, and now Irma, have impacted the business (building materials). Increasing sales but also causing significant price increases on input raw materials.&quot (Nonmetallic Mineral Products)
  • "Lumber prices starting to drop, and log prices starting to increase. Not the best combination.&quot (Wood Products)

Commenting on the much more 'normal' final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“While the headline PMI remained resiliently elevated in September, despite disruption from hurricanes Harvey and Irma, the details of the survey are more worrying. Output growth was unchanged on August’s 14-month low, and translates into stagnation at best in terms of the official manufacturing output data. Firms’ expectations of future output growth also slipped to a four-month low.


“There was better news on the hiring front, with job creation perking up to a nine-month high. However, with employment rising faster than output, productivity may be slipping.


“Although the hurricanes appear to have made little overall impact on production, supply delays were widely reported and prices for many inputs rose, suggesting some near-term upward pressure on inflation.”

Rather oddly, as Manufacturing output has declined, employment has improved notably...


Of course we are used to signals being completely contradictory in other nations...


YUNOSELL Mon, 10/02/2017 - 10:14 Permalink

It's coming to America firstThe cradle of the best and of the worstIt's here they got the rangeAnd the machinery for changeAnd it's here they got the spiritual thirstIt's here the family's brokenAnd it's here the lonely sayThat the heart has got to openIn a fundamental wayDemocracy is coming to the USA

Endgame Napoleon Five Star Mon, 10/02/2017 - 12:51 Permalink

They may have labor shortages due to paying too little to cover the cost of rent for the non parents and the non-custodial parents whose rent and groceries are not covered by welfare and child tax credits of up to $6,269. I do not believe they have labor shortages due to a lack of skill, as often claimed. They can train people.

In reply to by Five Star

Consuelo Mon, 10/02/2017 - 10:36 Permalink

  Interesting 'wide-angle' view of the Manufacturing Output and Manufacturing Employment graphs...The take-away being:Central Bank $$$interventions definitely DO have an impact.   The question remains - for how long and what happens when stealth QE comes to an end...?

Quivering Lip Mon, 10/02/2017 - 10:43 Permalink

Not to worry. The Goldman tax plan will inspire all major corporations to repatriate all global funds and use their tax cuts to invest in new factories and jobs instead of buying back shares.BwahahahhahahhahhahahhahahNot to worry not going to pass anyways but don't tell the stawk market.Bwahahahhahahhahhahahhahah

Falling Down Mon, 10/02/2017 - 11:53 Permalink

It's weird in manufacturing, right now. Why industrial automotive is strong beats the shit out of me, look at the construction numbers and tell me things "line up".Place I work at is busy enough, but we're not a bubble-chasing shit show that works their folks to death, like most manufacturers these days. 

Bobbyrib Mon, 10/02/2017 - 12:30 Permalink

It didn't take long to make America great again with Trumponomics. /sarcasm. This seems to be a case of fake it until you [do not] make it.

Davidduke2000 Mon, 10/02/2017 - 15:34 Permalink

Went this morning to walmart to buy some seeds for my bird, the parking was almost empty and there was a single cash open for the entire store at 10:00 am.what are these manufacturers are manufacturing ? and to who?? most stuff come from China.

tion Davidduke2000 Mon, 10/02/2017 - 17:12 Permalink

Current retail/sales model is largely unworkable for MiA products, stuff is getting sold direct to consumer or marketed to rich yuppies and foreigners.Would be really curious to see what the sales traffic looks like at a big box retailer across many different locations in the country, one that doesn't take EBT.  Maybe like Home Depot.  The one here is always booming, gets hard to find parking even, the one back home in middle America is like a ghost town even on the weekend.

In reply to by Davidduke2000

surf@jm Mon, 10/02/2017 - 16:00 Permalink

Yeah, the factory got smashed flat by the hurricane.........But, the good news, is the new orders are piling up, even though we can`t fill them......

Tachyon5321 Mon, 10/02/2017 - 16:47 Permalink

This year, my son got multi-job offers after getting his degree in industrial engineering.  His resume had a 70% reply rate. Manufacturing cannot get enough engineers because they are automating the production lines and cutting cost.