According to www.freightwaves.com, the Institute for Supply Management’s September PMI stood at 54.5, marking the ninth consecutive month of U.S. manufacturing expansion — though the reading was 10 basis points below August and 40 basis points short of consensus forecasts.
Industrial Expansion with Persistent Headwinds
The 54.5 PMI is consistent with approximately 2.4% GDP growth and signals underlying strength in the industrial economy entering Q4 2024. However, supply chain leaders continue facing acute pricing pressures: diesel costs, tariff-driven input inflation, and slowing supplier delivery times are tempering confidence. The ISM Supplier Delivery Index has signaled supply chain constraints for 10 consecutive months, underscoring persistent logistical friction.
The New Orders Index rose 1.6% from August to 55.4, also extending its streak to nine months of expansion. Five of the six largest tracked manufacturing industries — computer and electronics, chemical products, transportation equipment, food and beverage, and machinery — reported new-order growth in September.
Demand sentiment within the new-orders subindex weakened, falling to a positive-to-negative ratio of 1.7-to-1 in September, down from 2.5-to-1 in July — reflecting growing caution despite headline growth.
Pricing, Inventories, and Strategic Restocking
The ISM Price Index surged 6.8 points to 77.9, with 58.6% of respondents reporting higher prices. Raw material costs have risen for the 24th straight month. Inventory levels remained lean at 41.6 — a level typically associated with future production upside, though elevated costs may constrain restocking aggressiveness.
“The headwinds of rising interest rates and continued goods cost inflation could detract from some companies choosing to carry elevated stock levels,” said Julie Van de Kamp.
These dynamics directly impact freight markets: the industrial economy accounts for roughly two-thirds of less-than-truckload (LTL) revenue, and ISM readings tend to lead inflections in LTL data by about three months.
LTL Markets Reflect Industrial Momentum
Several publicly traded LTL carriers reported year-over-year tonnage growth that accelerated in Q3 2024 beyond Q2 levels. Old Dominion cited revenue gains even excluding fuel surcharges. LTL rates have climbed steadily through 2024, with the monthly cost per hundredweight running nearly 8% higher in September than a year earlier, according to FreightWaves SONAR data.
Some carriers have moved general rate increases forward. “All of this indicates really positive growth for LTL,” said Julie Van de Kamp, adding that full third-quarter earnings reports are expected to begin dropping later in October.
Source: FreightWaves
Compiled from international media by the SCI.AI editorial team.
