Economic activity in the manufacturing sector expanded in September following three consecutive months of slight contraction, and the overall economy grew for the 40th consecutive month, according to the latest Manufacturing ISM Report on Business.

The PMI registered 51.5%, an increase of 1.9% percentage points from August’s reading of 49.6%, indicating a return to expansion after contracting for three consecutive months, said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.

The New Orders Index registered 52.3%, an increase of 5.2 percentage points from August, indicating growth in new orders after three consecutive months of contraction. The Production Index registered 49.5%, an increase of 2.3 percentage points and indicating contraction in production for the second time since May 2009. The Employment Index increased by 3.1 percentage points, registering 54.7%. The Prices Index increased four percentage points from its August reading to 58%.

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.

Of the 18 manufacturing industries, 11 are reporting growth in September in the following order: Textile Mills; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Wood Products; Apparel, Leather & Allied Products; Paper Products; Petroleum & Coal Products; Primary Metals; Fabricated Metal Products; Furniture & Related Products; and Miscellaneous Manufacturing.

The six industries reporting contraction in September