The manufacturing landscape in the US Fifth District showed a modest shift in October 2024, as the composite manufacturing index registered at -14. While this figure reflects less pessimism than the previous month’s -21, it also marks a full year of consecutive negative readings, indicating ongoing challenges in the sector.

Slower Decline in New Orders

One of the primary factors contributing to the slight improvement in the index was a slowdown in the decline of new orders. The index for new orders improved to -17 in October, compared to -23 in September. This shift suggests that while demand remains weak, the pace of the decline is easing.

Shipments and Backlog Trends

Despite the improved new orders, shipments continued to decline, although at a reduced rate. The shipment index fell to -8 from -18 the previous month. Additionally, the backlog of orders saw another month of depletion, with the backlog index at -14, slightly better than September’s -16. This indicates that while new orders may be stabilizing, existing orders are still being processed at a slower rate.

Capital Expenditures and Employment

On the downside, capital expenditures experienced a notable downturn, with the index dropping to -23 from -13. Furthermore, employment figures also continued to decline, falling to -17 from -22. However, there was a silver lining, as wage growth showed some acceleration, rising to 16 from 15.

Price Trends

From a pricing perspective, input costs have slowed their rate of increase, with the index decreasing from 3.4 to 2.7. Nevertheless, manufacturers are still raising their output charges at a higher magnitude, with the output charges index moving up slightly from 1.6 to 1.7.

Conclusion

While the October data points to a slight easing of the manufacturing decline in the Fifth District, significant challenges remain. The ongoing decreases in capital expenditures and employment highlight the sector’s struggles, even as some metrics show signs of stabilization. As we move forward, it will be essential to monitor these trends to understand the broader economic implications.