In the last piece of major economic data before Tuesday’s fiercely contested election, the Institute for Supply Manager (ISM) data for US manufacturing activity had portrayed a surprisingly upbeat representation on October with factory activities rising more than anticipated, while new orders had climbed nearly to their 17-year peak, mostly buoyed by a transmutation in business investments towards motor vehicles alongside foods amid a pandemic resurgence which has been stoking fears of another round of forced business closures.
Nonetheless, although ISM (Institute of Supply Management) data for national factory activity had unveiled an upsurge to a figure of 59.3 last month, remarking the index’s highest level since November 2018 that followed a reading of 55.4 registered in September, analysts and economists had warned of a steep headwind ahead for the US manufacturing activity since an ongoing second wave of pandemic outbreak could lead to another leg of lockdown.
US manufacturing activities rise in October; outlook challenging
If truth is to be told, third quarter’s gain in US factory activities was almost entirely prompted by a trillion-dollar Government stimulus which had been dried up in August this year, while a resurgence in new cases across the United States forcing authorities to re-incline lockdown measures could hinder further gains, suggested analysts.
Meanwhile, addressing to a menacing impact of the pandemic outbreak’s fiscal fallouts, a chief economist at PNC Financial in Pittsburgh, Pennsylvania, Gus Faucher said following the release of the data, “Manufacturing rebounded strongly with fewer restrictions on economic activity and stimulus efforts, but the path forward will be more difficult as the economy continues to cope with the pandemic.
” On top of that, a likely early landslide for the Democratic contender Joe Biden given the scale of widening gaps in the opinion poll, is expected to create a stymied period of uncertainty, which would eventually take a hefty toll on November’s manufacturing activity, suggested analysts.