The manufacturing sector in the USA has been growing uninterruptedly for 10 months

Manufacturing activity in the United States gained momentum in October, with the strongest increase in production in nearly five years.

According to the data announced by the Institute of Supply Management (ISM), the manufacturing industry index increased by 1 point to 55.5 in October compared to the previous month. The index reached its second highest level in more than four years.

According to the results of Bloomberg's survey of economists, the median estimate was 54.5 points. Additionally, the index being above 50 indicates that there is growth in manufacturing activities.

Production is at its strongest level in nearly five years

According to the report published on Monday, the production index reached its highest level since late 2021.

The new orders index, one of the important indicators of demand, reached its highest level since July and continued its strong course in the expansion region.

The ISM manufacturing index pointed to growth for 10 consecutive months, showing that the recovery in the sector has become permanent after a period of contraction that lasted approximately three years.

The recovery in the manufacturing sector also supported manufacturers to increase their employment. While the number of employees in factories increased for the fourth consecutive month in October, the longest uninterrupted period of increase was recorded since the beginning of 2022.

Strong economic growth supports the manufacturing sector

U.S. manufacturers are finding support from strong economic growth, resilient consumer demand and corporate investment spending.

The US economy displayed its fastest growth performance in the last year in the third quarter. This growth was driven by companies' spending on data centers, artificial intelligence technologies, industrial equipment and other machinery investments.

However, in recent years, manufacturers have struggled with increased inflationary pressures and supply chain disruptions due to tariffs and the Iran war.

The inflation indicator preferred by the US Federal Reserve (Fed) increased by 3.6 percent on an annual basis in September, remaining significantly above the bank's 2 percent target.

The ISM report revealed that raw material prices in the manufacturing sector remained at high levels in October and supplier delivery times continued to extend.

ISM's price index decreased to 75.2 in October. Although the indicator decreased compared to the previous month, it remained above its level before the outbreak of conflicts in the Middle East.