(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in September for the eighth consecutive month, while the overall economy grew for the 71st consecutive month, say the nation''s supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. """"Manufacturing growth continued in September while some sectors of the economy are apparently struggling. The trend is toward slower growth in manufacturing as the rate of growth in both the New Orders Index and Production Index slowed. The sector is apparently in excellent shape with regard to inventories as the Inventories Index fell to 41.6 percent, indicating significant inventory liquidation, and the rate of growth in the Employment Index increased slightly in September. Overall, September looks like a good month for manufacturing.""""

TOP PERFORMING INDUSTRIES

The 11 industries reporting growth in September — listed in order — are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Paper Products; Nonmetallic Mineral Products; Chemical Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Computer & Electronic Products; and Transportation Equipment.

WHAT RESPONDENTS ARE SAYING ...

""""Business continues strong across all market segments."""" (Primary Metals)
""""Outlook going forward is cloudy due to concerns from the mortgage market."""" (Fabricated Metal Products)
""""Economy appears to be in neutral. Waiting to see if the consumer confidence shows itself for the Christmas season as gasoline prices level off."""" (Transportation Equipment)
""""Signs of softening in pace of new orders."""" (Miscellaneous Manufacturing)

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price

Chemicals; Corrugated Containers; Flour (2); Milk; Packaging Materials (2); Polypropylene (2); Soybean Products (4); Sulfuric Acid; and Wheat.

Commodities Down in Price

Aluminum Extrusions; Natural Gas (3); Nickel (3); and Stainless Steel.

Commodities in Short Supply

Sulfuric Acid (2) is the only commodity listed in short supply.

SEPTEMBER 2007 MANUFACTURING INDEX SUMMARIES
PMI

Manufacturing grew at a slower rate in September as the PMI registered 52 percent, a decrease of 0.9 percentage point when compared to August''s reading of 52.9 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 41.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates that both the overall economy and the manufacturing sector are growing. """"The past relationship between the PMI and the overall economy indicates that the PMI average for January through September (53 percent) corresponds to a 3.4 percent increase in real gross domestic product (GDP) annually. In addition, if the PMI for September (52 percent) is annualized, it corresponds to a 3.1 percent increase in real GDP annually.""""

New Orders

ISM''s New Orders Index registered 53.4 percent in September. The index is 1.9 percentage points lower than the 55.3 percent reported in August. A New Orders Index above 49.1 percent, over time, is generally consistent with an increase in the Census Bureau''s series on manufacturing orders (in constant 2000 dollars). Ten industries reported increases during September: Apparel, Leather & Allied Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Paper Products; Chemical Products; and Computer & Electronic Products.

Production

ISM''s Production Index registered 54.6 percent in September, which is 1.5 percentage points lower than the 56.1 percent reported in August. September is the eighth consecutive month of production growth for manufacturers. An index above 49.8 percent, over time, is generally consistent with an increase in the Federal Reserve Board''s Industrial Production figures. Of the industries reporting in September, 13 registered growth: Petroleum & Coal Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Paper Products; Wood Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Computer & Electronic Products; and Transportation Equipment.

Employment