U.S. Manufacturing Activity Climbs to Two-Year High
November 2, 2020
A shift toward spending on goods like automobiles during the pandemic has caused an acceleration in American manufacturing. The Institute for Supply Management’s (ISM) index of national factory activity increased to 59.3 in October, up from 55.4 the month before. This is the highest reading since November 2018.
Economists had expected a slight increase to 55.8 for the month. Any reading above 50 indicates expansion in manufacturing. The index that tracks new orders jumped to the highest level in nearly 17 years.
Economists hope that the strength in manufacturing, which accounts for about 12% of the nation’s total economic activity, will keep the economic recovery on track, even if consumer spending drops as the pandemic drags on. The pandemic has created a shift in spending away from services and toward goods.