Analysis and discussion of issues that impact business

The US economy looks like it might be getting out of the fast lane. The latest manufacturing sector numbers are in.

The nation’s manufacturing sector expanded at the slowest pace in over a year in September amid weaker U.S. auto sales and a slumping housing market, a trade group said Monday.

The good news is that September is the 40th consecutive month of growth.

An index put together by the Tempe, Arizona-based Institute for Supply Management, reported its lowest reading since May of 2005. This has some people concerned.

The manufacturing sector’s strength is waning after performing well in the first half of the year, said Dan Meckstroth, chief economist for the Manufacturers Alliance/MAPI trade group in Washington, D.C.

 So, things are still good, they're just not great like they were.

“For the first two quarters of the economy, you had manufacturing growth exceeding the growth of the general economy. That’s unusual,” Meckstroth said. He said a big reason was that companies wanted rebuild their inventories after last fall’s hurricanes. Inventories are ample now, and business is slowing down.

 There is some fallout because of that.

Furthermore, although falling commodity prices have been a relief for consumers, the lower prices are hurting some manufacturers — if they’ve stocked up on a once-expensive commodity that can now be bought at a cheaper price, it’s a capital loss, Meckstroth explained.

The roller coaster ride that is business. There are also numbers that will come as no real surprise to anyone.

Automakers General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group are cutting back production. The auto industry accounts for about 10 percent of the nation’s manufacturing, Meckstroth said.

Businesses that supply the auto industry are beginning to see some hard times. We'll see if that will be enough to put a serious drag on the economy.

Equipment manufacturing, however, remains a bright spot on the manufacturing landscape. Last month, heavy equipment maker Caterpillar said it would raise its machinery and engine prices early next year, citing a global upswing in construction, mining and energy exploration.

So, it seems things are chugging along, but more than a few people are waiting for the other shoe to drop. Stay tuned.