U.S. Factory Growth Picks Up in October as ISM Index Rises to 55.5

U.S. manufacturing activity grew for a tenth consecutive month in October, and at a faster pace, as the Institute for Supply Management's manufacturing PMI rose to 55.5, up 1 percentage point from 54.5 in September, ISM said Monday. A reading above 50 indicates the sector is generally expanding.

The PMI is a diffusion index built from surveys of purchasing and supply managers. It measures how widespread growth is across the sector, not the pace of output growth itself.

Production was the standout: the Production Index jumped 2.3 points to 59, its highest reading since November 2021. New orders expanded for a tenth straight month at 55.5, and employment remained in growth territory at 52.4, edging down from 52.7 in September. The prices index stayed elevated at 75.2, though down from September's 77.9, indicating input costs are still rising but a bit more slowly.

Five of the six largest manufacturing industries expanded in October, including machinery, computer and electronic products, and transportation equipment.

Still, factory sentiment worsened for a third month: negative comments outnumbered positive ones two to one, with panelists citing pricing volatility, longer lead times, tariffs and the Iran war.

(File photo: A manufacturing facility. The image is illustrative and does not depict a specific plant. Photo: Pxhere, CC0)