Is Manufacturing Beginning to Pick Up?

The Institute for Supply Management released new manufacturing numbers on October 1. The Purchasing Managers’ Index, or PMI, grew 1.9 percent from August to 51.5 percent, meaning a return to growth after three months of contraction.

The report states that, “Comments from the panel reflect a mix of optimism over new orders beginning to pick up, and continued concern over soft global business conditions and an unsettled political environment.”

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New orders grew 5.2 percent from August to 52.3 percent. The employment index grew again, up 3.1 percent to 54.7 percent. Production increased to 49.5 percent, but is still in contraction.

Computer and electronics manufacturing reported overall contraction. While companies like Apple (NASDAQ:AAPL) may have done well, general decline in personal computing and database orders have hurt companies like Dell (NASDAQ:DELL) and Intel (NASDAQ:INTC).

Chemical products also contracted, despite a strong year to date for NewMarket Corp (NYSE:NEU) and Colgate-Palmolive (NYSE:CL).

Tobacco products are near the top of the list for growth, followed by a strong year and “buy” reiterations for Philip Morris (NYSE:PM) and Lorillard (NYSE:LO). Phillip Morris is being hailed as a “dividend champion” for investors.

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