Manufacturing continued to grow in October, and at an accelerated rate as the PMI registered 56.9 percent, an increase of 2.5 percentage points when compared to September's reading of 54.4 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 18th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 15th consecutive month. Ore stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through October (57.4 percent) corresponds to a 5.2 percent increase in real gross domestic product (GDP). In addition, if the PMI for October (56.9 percent) is annualized, it corresponds to a 5 percent increase in real GDP annually."
WHAT RESPONDENTS ARE SAYING ...
•"The dollar is weakening again, which is resulting in higher costs for our materials we purchase overseas. It is hurting our profit margins." (Transportation Equipment)
•"Business slowing down but still double digit over last year." (Chemical Products)
•"Currency continues to wreak havoc with commodity pricing."(Food, Beverage & Tobacco Products)
•"Customers remain cautious, placing orders at the last minute, making supply planning a challenge." (Machinery)
•"Our customer base — auto manufacturers — is expanding capacity and making major capital investments." (Fabricated Metal Products)