TEMPE, AZ – The slowdown in housing and other markets is starting to back up on manufacturing, according to a report released today by the Institute for Supply Management.

Manufacturing grew in October but at a slower rate as the PMI registered 50.9%, down 110 basis points from September. A reading above 50% indicates that the manufacturing economy is generally expanding.

It was the ninth consecutive month manufacturing sector economic activity expanded, the trade group said.

A PMI over 41.9%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates that both the overall economy and the manufacturing sector are growing. Historical correlations between the PMI and the overall economy indicates that the PMI average for January through October (52.8%) corresponds to a 3.4% increase in real GDP annually.

In a statement, ISM spokesman Norbert J. Ore said, “Manufacturing growth slowed in October to its lowest level since March. While the New Orders Index continued to grow and the Production Index fell below 50% for the first time since January 2007, the Employment Index grew slightly, signaling continuing strength in manufacturing employment. It does appear that the impact of the slowdown in the financial, housing and transportation segments has spilled over into manufacturing with the exception being continued strength in new export orders.”

The production index was 49.6%, down five points and reversing an eighth-month trend. The new orders index was 52.5%, 90 basis point lower than September. A new orders index above 49.1%, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The overall economy grew for the 72nd consecutive straight month in October.

Computer and Electronic Products was among the sectors reporting growth in production and orders.

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