Even with recent slumps attributed to Hurricane Irma and Hurricane Harvey, the American manufacturing industry continues to make strong gains. This isn’t just a sudden “surge,” either. On the contrary, analysts expect the American manufacturing industry to continue making these gains through the end of the year at least. So, what’s the current state of the manufacturing industry look like exactly?
The Institute for Supply Management (ISM) has just released its new index for the American manufacturing industry, revealing a near 13-year high for the industry’s purchasing managers’ index in October. As explained by Investopedia, the purchasing managers’ index (PMI) is a metric used to measure the economic health of the manufacturing industry. It uses a formula based specifically on five elements: new orders, inventory levels, production, delivers and employment. Using the PMI, investors and analysts can accurately determine the overall health of the industry.
There are several factors contributing to the American manufacturing industry’s strong PMI in October, one of which is new orders for manufacturing companies located in areas affected by hurricanes. When Hurricane Irma and Hurricane Harvey initially hit, it forced thousands of businesses to close their doors, including manufacturing companies. With recovering nearly completion, however, many of these businesses are able to resume their normal operations. This means manufacturing companies can begin producing and selling companies again, which of course is one of the reasons why the market has rebounded so strongly after Hurricane Irma and Hurricane Harvey.
Additionally, IHS Markit explained that demand from foreign markets has helped the American manufacturing grow. With foreign companies buying more products manufactured here in the United States, it helps American manufacturers increase their revenue.
“New business received by manufacturers increased solidly,” IHS Markit said in a statement. “Demand from foreign clients was also substantial, reflected in the quickest rise in export orders since August 2016.”
This isn’t the only good news for the American manufacturing industry. Reports indicate that manufacturers are hiring more workers to fill empty positions on the assembly lines. A recent jobs report released by the government suggest an additional 74,000 factory jobs were created in just the past three months. To put that number into perspective, that’s the most jobs created in such a short period of time in four years. Furthermore, the total amount of workers employed in the American manufacturing industry has climbed to 12.5 million, which is the highest its been since the beginning of 2009.