US manufacturing struggling against supply-chain headwinds in October

US manufacturing sector activity continued to grow at a brisk pace last month, the results of a closely-followed survey revealed.

But some economists believed that the details of the report pointed to downside risks over the next few months.

The Institute for Supply Management's factory sector Purchasing Managers' Index drifted lower, from a reading of 61.1 for September to 60.8 (consensus: 60.5).

However, the key sub-index linked to firms' new orders slipped from 66.7 to 59.8 - its lowest print since June 2020 - while that tracking the prices paid by firms rose again, from 81.2 to 85.7.

And purchasing managers' responses all pointed to ongoing, when not worsening, supply problems.

One respondent from the Computer and Electronics Products sector went as far as to tell ISM that "getting anything from China is near impossible".

According to Ian Shepherdson, chief economist at Pantheon Macroeconomics, "it's possible that orders growth has slowed because what’s the point of ordering something unobtainable?"

"That said, the downturn in China’s PMIs points to downside risk for the ISM over the next few months, though U.S. manufacturing will not slow as much as China’s, which is being hurt by the authorities’ pursuit of zero Covid. At the same time, U.S. manufacturers have seen a bigger demand boost as a result of the outsized fiscal stimulus."