Production grew at an accelerated rate in October, with the pace of expansion reaching an eight-month high. Anecdotal evidence suggested the rise was due to a strong demand environment and larger new order volumes.
Similarly, new business received by manufacturers increased solidly and at the fastest pace since March. Panellists generally attributed the upturn to larger client bases. Demand from foreign clients was also substantial, reflected in the quickest rise in export orders since August 2016. Survey respondents noted firmer demand among clients from Europe and Asia.
In response to greater production requirements, US manufacturing firms expanded their workforce numbers and at the strongest rate since June 2015. Despite further job creation, the level of outstanding business grew for the third successive month.
Meanwhile, purchasing activity continued to rise, with firms replenishing inventories to ensure orders could be met in a timely manner. Notably, both preproduction inventories and buying levels rose at the fastest pace in three months.
On the prices front, inflationary pressures remained marked in October. Output charge inflation accelerated to a solid rate that was the fastest since April. Input costs, however, increased at a slightly softer pace than September. The rate of inflation was nonetheless sharp and above the survey average. Panellists linked the rise to supplier shortages stemming from supply chain disruption after the recent hurricanes. Furthermore, supplier delivery times lengthened to the greatest extent since February 2014.
Expectations regarding future output improved to a three-month high in October. Anecdotal evidence linked confidence to more favourable business conditions.