While the headline number shows relative strength this month as the PMI reading of 54.4 percent is still quite positive (anything above 50 shows expansion) the overall picture is less encouraging. The growth of new orders continued to slow, as the index is down significantly from its high this year of 65.9% back in January 2010. Production is currently growing at a faster rate than new orders, but it typically lags and would be expected to possibly weaken further in the fourth quarter of this year. Manufacturing has enjoyed a stronger recovery than other sectors of the economy, but it appears that weaker growth is the expectation for the fourth quarter. Both the Inventories and Backlog of Orders Indexes are sending strong negative signals of weakening performance in the sector. It seems like the summer slowdown in the economy is likely carrying over to the fourth quarter.
See table below for details: (Double click for larger image)
