Economic activity in the manufacturing sector expanded in September for the 16th consecutive month, and the overall economy grew for the 64th consecutive month, said the nation’s supply executives in the latest Manufacturing ISM Report On Business.
The report was issued Oct. 1, by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. “The September PMI registered 56.6 percent, a decrease of 2.4 percentage points from August’s reading of 59 percent, indicating continued expansion in manufacturing. The New Orders Index registered 60 percent, a decrease of 6.7 percentage points from the 66.7 percent reading in August, indicating growth in new orders for the 16th consecutive month. The Production Index registered 64.6 percent, 0.1 percentage point above the August reading of 64.5 percent. The Employment Index grew for the 15th consecutive month, registering 54.6 percent, a decrease of 3.5 percentage points below the August reading of 58.1 percent. Inventories of raw materials registered 51.5 percent, a decrease of 0.5 percentage point from the August reading of 52 percent, indicating growth in inventories for the second consecutive month. Comments from the panel reflect a generally positive business outlook, while noting some labor shortages and continuing concern over geopolitical unrest.”
Of the 18 manufacturing industries, 15 are reporting growth in September in the following order: Wood Products; Primary Metals; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Furniture & Related Products; Fabricated Metal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Computer & Electronic Products; Paper Products; Chemical Products; Transportation Equipment; Petroleum & Coal Products; and Textile Mills. The three industries reporting contraction in September are: Machinery; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components.
WHAT RESPONDENTS ARE SAYING …
- “Business seems to be picking-up as fuel prices drop. More disposable income at the C store level where many of our products are sold.” (Food, Beverage & Tobacco Products)
- “Warehouse and multifamily construction seems to be continuing strong.” (Fabricated Metal Products)
- “World political unrest is creating additional defense requirements.” (Transportation Equipment)
- “We are seeing shipments up, year-over-year, in the 8 to 10 percent range for last couple of months. This is good.” (Apparel, Leather & Allied Products)
- “Seen an increase in sales due to government fiscal year-end.” (Computer & Electronic Products)
- “Demand is pretty good overall. Freight continues to be a major issue.” (Chemical Products)
- “Things are a bit slower than the first half.” (Printing & Related Support Activities)
- “Outlook is very good. Demand seems to be growing.” (Paper Products)
- “Our search continues for good machinists and electrical engineers.” (Machinery)
- “Overall, orders are at the strongest point this year.” (Miscellaneous Manufacturing)
ISM’s Production Index registered 64.6 percent in September, which is a slight increase of 0.1 percentage point when compared to the 64.5 percent reported in August, indicating growth in production for the seventh consecutive month. This is the highest reading since May 2010 when the Production Index also registered 64.6 percent. An index above 51.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The 15 industries reporting growth in production during the month of September — listed in order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Textile Mills; Wood Products; Printing & Related Support Activities; Primary Metals; Computer & Electronic Products; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Plastics & Rubber Products; Transportation Equipment; Miscellaneous Manufacturing; and Chemical Products. The only industry reporting a decrease in production during September is Machinery.
The Manufacturing ISM Report On Business is published monthly by Institute for Supply Management, the first supply institute in the world. Founded in 1915, ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. By executing and extending its mission through education, research, standards of excellence and information dissemination — including the renowned monthly ISM Report On Business — ISM maintains a strong global influence among individuals and organizations. ISM is a not-for-profit educational association that serves professionals with an interest in supply management who live and work in more than 80 countries. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM Report On Business is posted on ISM’s website at www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM Report On Business featuring the October 2014 data will be released at 10 a.m. (ET) on Monday, Nov. 3, 2014.
Source: Institute for Supply Management