US factory activity picked up in September

“The bottom line is that the manufacturing sector still faces challenging conditions,” said Richard Moody, chief economist at Regions Financial.

A measure of employment was 49.7, its third straight month of decline. That is a sign manufacturers are laying off workers. Bradley Holcomb, chair of the ISM manufacturing business survey committee, said factories are able to produce goods at current or even higher levels without additional workers, so the groups expects “little, if any, gains” in jobs.

And of the 18 industries tracked in the report, 11 reported contraction, including the petroleum, wood, apparel, machinery, fabricated metals and transportation equipment sectors.

New orders climbed into positive territory with a 55.1 reading, after declining in August.

Other reports show that manufacturing still faces challenges.

Orders for durable goods were nearly flat in August, with an $85 million fall from July to $226.9 billion, the Commerce Department said last week. The tick down mostly stemmed from a steep 21.9 per cent drop in the volatile category of commercial aircraft. Total orders have slipped 0.6 per cent so far this year to $1.8 trillion.

Factory productivity dropped 0.4 per cent in August, the Federal Reserve said in a recent report. Cutbacks occurred at makers of appliances, home electronics and machinery. This slowdown has led factories to shed 30,000 workers in the past year. A broader measure of industrial output, which includes mines and utilities, also dropped 0.4 per cent, the Fed said.

Josh Boak, The Associated Press

by Canadian Press

US factory activity picked up in September

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