Strong October For U.S. Manufacturing

Single Best Monthly Showing Since April 2011

US ManufacturingDespite the federal government shutdown, the U.S. manufacturing sector expanded at its quickest rate in more than two years in October, according to a just-released industry report.

An index from the Institute for Supply Management (ISM) that measures national factory activity accelerated to 56.4, an increase of 0.2 percentage point from September and the single best monthly showing since April 2011. A reading of 50 indicates expansion, and October marked the fifth consecutive month of more rapid growth since manufacturing shrunk in May, the survey shows. Of the 18 industries in the sector, 14 of them reported increases in October. These included textile mills, furniture, electrical equipment, transportation products, machinery, plastics, fabricated metals and more.

News of heightened activity in such a broad range of sub-sectors has ad specialty distributors believing that business with manufacturing clients will hold firm or expand in the months ahead. "I'm anticipating that business will remain steady for 2014," says Heidi Thorne, owner of Thorne Communications (asi/344244), who works with manufacturing clients tied to the construction industry.

While the ISM index's readings on new orders, inventories, exports and supplier deliveries all increased, there were a few sour notes in the ISM report. The employment index dipped to 53.2 last month after a September in which a 15-month high of 55.4 was achieved. Also, production stepped back to 60.8 from 62.6.