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December Manufacturing ISM Report On Business®; PMI at 57%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Growing

Dépèche transmise le 3 janvier 2011 par Business Wire

December Manufacturing ISM Report On Business®; PMI at 57%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Growing

December Manufacturing ISM Report On Business®; PMI at 57%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Growing

TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in December for the 17th consecutive month, and the overall economy grew for the 20th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

“The end of the year is surprisingly busy.”

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The manufacturing sector continued its growth trend as indicated by this month’s report. We saw significant recovery for much of the U.S. manufacturing sector in 2010. The recovery centered on strength in autos, metals, food, machinery, computers and electronics, while those industries tied primarily to housing continue to struggle. Additionally, manufacturers that export have benefited from both global demand and the weaker dollar. December’s strong readings in new orders and production, combined with positive comments from the panel, should create momentum as we go into the first quarter of 2011.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 11 are reporting growth in December, in the following order: Apparel, Leather & Allied Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Textile Mills; Plastics & Rubber Products; Transportation Equipment; Electrical Equipment, Appliances & Components; and Chemical Products. The four industries reporting contraction in December are: Nonmetallic Mineral Products; Paper Products; Printing & Related Support Activities; and Miscellaneous Manufacturing.

WHAT RESPONDENTS ARE SAYING …

  • “Company outlook looks positive into 2011. Solid revenue growth across the globe driven by strong volume in Q3 and Q4 2010.” (Chemical Products)
  • “We continue to see strong demand for our product in Europe and Asia.” (Electrical Equipment, Appliances & Components)
  • “The end of the year is surprisingly busy.” (Computer & Electronic Products)
  • “Business remains slow, while vendors clamor for increases that should have no foundation in economics.” (Nonmetallic Mineral Products)
  • “Strong pressure still exists on raw material prices in almost every area. It is unclear as to whether they can get them.” (Plastics & Rubber Products)

MANUFACTURING AT A GLANCE
DECEMBER 2010

           
Index

Series
Index
December

Series
Index
November

Percentage
Point
Change

Direction

Rate of
Change

Trend(a)
(Months)

 
PMI 57.0 56.6 +0.4 Growing Faster 17
New Orders 60.9 56.6 +4.3 Growing Faster 18
Production 60.7 55.0 +5.7 Growing Faster 19
Employment 55.7 57.5 -1.8 Growing Slower 13
Supplier Deliveries 55.9 57.2 -1.3 Slowing Slower 19
Inventories 51.8 56.7 -4.9 Growing Slower 6
Customers’ Inventories 40.0 45.5 -5.5 Too Low Faster 21
Prices 72.5 69.5 +3.0 Increasing Faster 18
Backlog of Orders 47.0 46.0 +1.0 Contracting Slower 4
Exports 54.5 57.0 -2.5 Growing Slower 18
Imports 50.5 53.0 -2.5 Growing Slower 16
OVERALL ECONOMY

 

Manufacturing Sector

Growing Faster 20
Growing Faster 17

(a) Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (4); Brass; Caustic Soda (5); Chemicals (3); Copper (5); Copper Based Products (2); Corn (4); Corrugated Containers (10); Diesel; Electronic Components; Gasoline; High Density Polyethylene; Natural Gas(b); Nickel (2); PET; Plastic Resins (2); Polyester; Polyethylene (4); Resins (2); Soybean Oil (2); Stainless Steel (2); Starch; Steel (4); Steel Products; Sulfur; Tin Plate; Titanium Dioxide (2); and Wheat.

Commodities Down in Price

Natural Gas(b) (2) is the only commodity reported down in price.

Commodities in Short Supply

Cocoa Powder (4) is the only commodity reported in short supply.

Note: The number of consecutive months the commodity is listed is indicated after each item.

(b) Reported as both up and down in price.

DECEMBER 2010 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued to grow in December as the PMI registered 57 percent, an increase of 0.4 percentage point when compared to November’s reading of 56.6 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 20th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 17th consecutive month. Ore stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (57.3 percent) corresponds to a 5.1 percent increase in real gross domestic product (GDP). In addition, if the PMI for December (57 percent) is annualized, it corresponds to a 5 percent increase in real GDP annually."

THE LAST 12 MONTHS

          Month                     PMI                             Month                     PMI
 
Dec 2010 57.0 Jun 2010 56.2
Nov 2010 56.6 May 2010 59.7
Oct 2010 56.9 Apr 2010 60.4
Sep 2010 54.4 Mar 2010 59.6
Aug 2010 56.3 Feb 2010 56.5
Jul 2010 55.5 Jan 2010 58.4

Average for 12 months – 57.3
High – 60.4
Low – 54.4

New Orders

ISM’s New Orders Index registered 60.9 percent in December, which is an increase of 4.3 percentage points when compared to the 56.6 percent reported in November. This is the 18th consecutive month of growth in the New Orders Index. A New Orders Index above 50.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The 10 industries reporting growth in new orders in December — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Furniture & Related Products; Computer & Electronic Products; Machinery; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Transportation Equipment. The four industries reporting decreases in new orders in December are: Nonmetallic Mineral Products; Paper Products; Chemical Products; and Printing & Related Support Activities.

New Orders           %Better         %Same         %Worse         Net         Index
 
Dec 2010 31 47 22 +9 60.9
Nov 2010 30 45 25 +5 56.6
Oct 2010 36 39 25 +11 58.9
Sep 2010 26 52 22 +4 51.1

Production

ISM’s Production Index registered 60.7 percent in December, which is an increase of 5.7 percentage points from the November reading of 55 percent. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures. This is the 19th consecutive month the Production Index has registered above 50 percent.

The nine industries reporting growth in production during the month of December — listed in order — are: Apparel, Leather & Allied Products; Computer & Electronic Products; Primary Metals; Furniture & Related Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Machinery; Transportation Equipment; and Chemical Products. The six industries reporting a decrease in production in December — listed in order — are: Nonmetallic Mineral Products; Paper Products; Textile Mills; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; and Printing & Related Support Activities.

Production           %Better         %Same         %Worse         Net         Index
 
Dec 2010 30 52 18 +12 60.7
Nov 2010 26 54 20 +6 55.0
Oct 2010 37 49 14 +23 62.7
Sep 2010 31 54 15 +16 56.5

Employment

ISM’s Employment Index registered 55.7 percent in December, which is 1.8 percentage points lower than the 57.5 percent reported in November. This is the 13th consecutive month of growth in manufacturing employment. An Employment Index above 49.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, nine reported growth in employment in December in the following order: Apparel, Leather & Allied Products; Primary Metals; Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Transportation Equipment; Machinery; Electrical Equipment, Appliances & Components; and Paper Products. The five industries reporting a decrease in employment during December are: Nonmetallic Mineral Products; Furniture & Related Products; Miscellaneous Manufacturing; Printing & Related Support Activities; and Textile Mills.

Employment           %Higher         %Same         %Lower         Net         Index
 
Dec 2010 22 66 12 +10 55.7
Nov 2010 25 65 10 +15 57.5
Oct 2010 26 64 10 +16 57.7
Sep 2010 25 62 13 +12 56.5

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in December as the Supplier Deliveries Index registered 55.9 percent, which is 1.3 percentage points lower than the 57.2 percent registered in November. This is the 19th consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.

The eight industries reporting slower supplier deliveries in December — listed in order — are: Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Machinery; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Chemical Products; and Transportation Equipment. The two industries reporting faster deliveries in December are: Printing & Related Support Activities; and Computer & Electronic Products.

Supplier Deliveries           %Slower         %Same         %Faster         Net         Index
 
Dec 2010 15 78 7 +8 55.9
Nov 2010 18 77 5 +13 57.2
Oct 2010 13 77 10 +3 51.2
Sep 2010 17 76 7 +10 52.3

Inventories

Manufacturers’ inventories grew for the sixth consecutive month in December, but at a slower rate as the Inventories Index registered 51.8 percent. The index is 4.9 percentage points lower than the 56.7 percent reported in November. An Inventories Index greater than 42.6 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis’ (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The six industries reporting higher inventories in December — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Chemical Products. The eight industries reporting decreases in inventories in December — listed in order — are: Nonmetallic Mineral Products; Furniture & Related Products; Printing & Related Support Activities; Paper Products; Miscellaneous Manufacturing; Transportation Equipment; Primary Metals; and Plastics & Rubber Products.

Inventories           %Higher         %Same         %Lower         Net         Index
 
Dec 2010 24 52 24 0 51.8
Nov 2010 25 58 17 +8 56.7
Oct 2010 27 52 21 +6 53.9
Sep 2010 27 58 15 +12 55.6

Customers’ Inventories(c)

The ISM Customers’ Inventories Index registered 40 percent in December, 5.5 percentage points lower than in November when the index registered 45.5 percent. This is the 21st consecutive month the Customers’ Inventories Index has been below 50 percent, indicating that respondents believe their customers’ inventories are too low at this time.

The two manufacturing industries reporting customers’ inventories as being too high during December are: Textile Mills and Miscellaneous Manufacturing. The 11 industries reporting customers’ inventories as too low during December — listed in order — are: Printing & Related Support Activities; Machinery; Plastics & Rubber Products; Computer & Electronic Products; Primary Metals; Chemical Products; Nonmetallic Mineral Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Fabricated Metal Products.

Customers’ Inventories          

%
Reporting

   

%Too
High

   

%About
Right

   

%Too
Low

    Net     Index
 
Dec 2010 67 8 64 28 -20 40.0
Nov 2010 77 13 65 22 -9 45.5
Oct 2010 72 15 58 27 -12 44.0
Sep 2010 79 13 59 28 -15 42.5

Prices(c)

The ISM Prices Index registered 72.5 percent in December, 3 percentage points higher than the 69.5 percent reported in November. This is the 18th consecutive month the Prices Index has registered above 50 percent. While 48 percent of respondents reported paying higher prices and 3 percent reported paying lower prices, 49 percent of supply executives reported paying the same prices as in November. A Prices Index above 49.3 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.

The 14 industries reporting paying increased prices during the month of December — listed in order — are: Plastics & Rubber Products; Paper Products; Printing & Related Support Activities; Primary Metals; Chemical Products; Textile Mills; Food, Beverage & Tobacco Products; Transportation Equipment; Machinery; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; and Electrical Equipment, Appliances & Components. None of the 18 manufacturing industries reported paying lower prices on average during December.

Business Wire

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Prices           %Higher         %Same         %Lower         Net         Index
 
Dec 2010 48 49 3 +45 72.5
Nov 2010 48 43