Prices paid

This easing of price pressures is a positive sign for manufacturers, as it reduces the inflationary burden on their production costs, but it also reflects weakening demand, which could weigh on future growth. The manufacturing sector continues to face headwinds as demand and global economic conditions remain fragile.

Notables:

Supplier Deliveries at 52.2%, rose by 1.7% in September, indicating slower delivery times, which is generally a sign of increasing demand or constrained supply chains. Slower deliveries usually point to improving manufacturing activity as suppliers struggle to keep up with demand.

Production Index at 49.8%, increased by 5.0%, suggesting that production contraction is slowing down. This rebound is a positive signal, although still below the expansion threshold of 50%. Growth in sectors like Computer & Electronic Products and Food, Beverage & Tobacco Products supported this improvement.

New Orders at 46.1%, up 1.5% from August, showing a slower rate of contraction in new demand. Although still below 50%, this slight improvement is a positive sign, driven by pockets of strength in sectors like Computer & Electronic Products.

Backlog of Orders at 44.1%, gained 0.5%, showing a slower rate of contraction in backlogs. As new orders stabilize, companies are able to process backlogs more efficiently, suggesting some resilience in demand.


Employment Index at 43.9%, fell by 2.1%, reflecting faster contraction in manufacturing employment. This drop is significant as it suggests ongoing weakness in hiring, and that manufacturers are cutting jobs or reducing hiring amid uncertainty and slower growth.

Inventories at 43.9%, plunged by 6.4%, marking a faster contraction in inventories. This is likely due to manufacturers drawing down existing inventories rather than replenishing stock, which can signal weak confidence in future demand.

Prices Index at 48.3%, dropped sharply by 5.7%, indicating that raw material prices are decreasing after eight months of continuous price increases. The drop in prices suggests easing inflationary pressures in the supply chain, as companies report declines in petroleum, aluminum, and steel prices.

New Export Orders at 45.3%, declined by 3.3%, indicating continued weakness in international demand. Ongoing global economic challenges, including slowing economies in Europe and Asia, are contributing to this downside factor.