Many economists thought the manufacturing industry was going to shrink in September for the first time in two years. But manufacturers surprised them by beating expectations and actually increasing production, according to the Institute for Supply Management’s manufacturing index.
The manufacturing index is on a scale from 1-100. Any number below 50 means manufacturing fell in a given month, while anything above 50 means manufacturing rose. For the past 26 months, manufacturing has been above 50. In September, the index rose to 51.6 from August’s 50.6 rating.
There has been a lot of worry about Greece’s debt or other international troubles potentially leading to a global economic slowdown. So far these concerns haven’t been able to deter manufacturers from expanding their operations and even hiring new employees.
Manufacturing is one of the best indicators of where the economy is heading because if consumers are willing to buy more, of course manufacturing will have to increase to keep up with demand. The opposite is also true. Although it’s hovering near the breakeven point, manufacturing has managed to hold onto gains for more than two years, a feat few other industries can boast.
Smart manufacturers are turning to manufacturing inventory software to help them make informed decisions about how much to produce at different times. Consumer demand is never constant, which is why it’s important to always stay on top of your inventory management so you don’t wind up with too many or too few products.