Production jumps to 5-year high amid AI boom, ISM finds, but business leaders are ‘very worried’ U.S. manufacturers in October pumped out the most goods — plastics, computers, electrical equipment and so forth — in five years as a growing economy and a revolution in artificial intelligence stoked demand. Stubborn inflation was still a big problem, however, and companies had trouble obtaining supplies and delivering goods to customers in a timely manner. The Institute for Supply Management said its survey of manufacturers rose slightly to 55.5% in October from 54.5% in the prior month, just a hair below a four-year high.
Any number above 50% signals expansion. The ISM index has been in positive territory for 10 straight months after nearly a year of sub-50% readings. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it.
I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time. An AI boom has powered the rebound in manufacturing, but the lingering effects of the Trump tariffs, high oil prices tied to the Iran war and difficulty obtaining supplies have removed some of the shine.
New orders rose slightly (55.5% vs. 55.3%) and were quite strong. Manufacturers also added more workers and hours for the fourth month in a row after three years of contracting employment. A measure of inflation stayed near a four-year high, reflecting higher costs companies are incurring to obtain energy and other supplies.
The AI boom has created shortages and rising prices for several critical products. Deliveries of customer orders were also taking longer. Typically that’s a sign of economic expansion, but now it stems largely from delays in receiving supplies to finish products on time.
We are hand-to-mouth,” an executive at a machinery maker told ISM. As good as business has been lately, they say, it could be so much better. That’s also true of the broader U.S. economy.
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