Now may be a good time for distributors to start connecting with new clients in the manufacturing industry. A report released Monday revealed that the sector experienced robust growth in October amid a surge in new orders, beating the predictions of economists and returning to its fastest acceleration rate in three-and-half years.
The Institute for Supply Management said its index of national factory activity increased from 56.6 in September to 59 last month. The October reading matched the August tally, which had been the highest since March 2011. Economists polled by Reuters had predicted an index score of 56.2. Readings above 50 indicate the industry is expanding.
Manufacturing’s strong performance was driven, in part, by a rebound in new orders, the index for which leapt from 60 in September to 65.8 in October. The employment picture also brightened, with a gauge on manufacturing jobs improving from 54.6 to 55.5 – another reading that surpassed economists’ predictions.
Amid the gains in orders and employment, manufacturers also spent less to operate, with an index of prices-paid falling by six points to 53.5. The drop – the largest since a seven-point fall in March 2013 – occurred as oil prices decreased precipitously.
While data on manufacturing was positive, the construction sector struck a more desultory note. For a second straight month, construction spending fell as investment in private and public projects declined. The U.S. Department of Commerce reported that spending slipped .4% to an annual rate of $950.9 billion. In August, spending scaled down .5%.