Manufacturing Index Falls in October But Remains Strong

.S. manufacturing declined in October but expanded at the second-fastest pace of the year, according to the Institute for Supply Management’s monthly factory index report released Tuesday.

The October level fell to 59.1 from 59.4 in September, ISM said. The September level had been the highest in 13 months.

Readings higher than 50 indicate growth, and manufacturing has shown expansion since May 2003.

The group's new orders gauge, which makes up about a third of the total index, fell to 61.7 from 63.8 in September. The production index, a measure of work being performed, fell to 62 from 63.1.

“The index continued its strong performance supported by continuing growth in new orders and production," said Norbert Ore, chairman of ISM’s manufacturing committee.

"Rising prices, and energy costs in particular, are of major concern as manufacturers are struggling to control costs,” he said in a statement.

ISM’s employment index rose to 55 from 53.1 in September. The inventories index fell to 48.1 from 49.6, while new export orders fell to 54.8 from 56.9

ISM, headquartered in Tempe, Ariz., surveys more than 400 companies in 20 industries, including transportation, to compile its index.