The index of business activity in the American industrial sector fell in September to 50.2

01.10.2015

The index of manufacturing activity in the US (ISM Manufacturing) fell in September to 50.2 points from 51.1 points a month earlier, according to the Institute for Supply Management (ISM).

Analysts surveyed by Bloomberg predicted a drop in the index to 50.6 points.

An index value below 50 indicates a decrease in business activity in this segment of the economy, and respectively, at the level of more than 50 points indicates its growth.

As the ISM study shows, the demand abroad for US manufactured goods fell to the lowest level since July 2012, amid the problems in the world economy, from China to the Eurozone. Strong domestic demand is supported by industrial production in the country, but the growth of dollar makes the purchase of American goods more expensive for foreign buyers.

At the same time the weak statistical data may be an argument for the Federal Reserve System in favor of a later increase of the key rate in the country, analysts say.

According to futures quotes on the level of the basic interest rate, the probability of its raising by US Central Bank in December of the current year is estimated by the market at 41%, and in January 2016 - at 48%, while the chances that the first rate hike will take place in the period up to March next year is estimated by the market at 63%.

"The forecast for industrial production cannot be considered good - said an economist at FTN Financial, Jay Morlock. - Demand is reduced, and the dollar is growing, so it could hit our exports."

The calculated ISM index that tracks the flow of new orders in the US in September fell to 50.1 points from 51.7 points in June. At the same time the indicator of stocks remained at 48.5 points.

Employment indicator fell to 50.5 points compared with 51.2 points a month earlier.

The share of the manufacturing sector accounts for about 12% of the US economy.

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