Dépêches

April Manufacturing ISM Report On Business®; PMI at 60.4%; New Orders, Production, Employment and Inventories Growing; Supplier Deliveries Slower

Dépèche transmise le 2 mai 2011 par Business Wire

TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in April for the 21st consecutive month, and the overall economy grew for the 23rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business^®.

“Rapidly rising raw material costs putting extreme pressure on profits.”

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 recent trend of rapid growth in the manufacturing sector continued in April as the PMI registered above 60 percent for the fourth consecutive month. The New Orders and Production Indexes continue to drive the PMI, as they have both exceeded 60 percent for five consecutive months. Manufacturing employment appears to have developed significant momentum, as the Employment Index readings for the first four months of 2011 are the highest readings in the last 38 years. Inventory growth also took place in April after two months of destocking; however, the inventory restocking would appear to be necessitated by the strong performance in new orders. While the manufacturing sector is definitely performing above most expectations so far in 2011, manufacturers are experiencing significant cost pressures from commodities and other inputs.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 17 are reporting growth in April, in the following order: Wood Products; Plastics & Rubber Products; Primary Metals; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; Apparel, Leather & Allied Products; Machinery; Textile Mills; Paper Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Printing & Related Support Activities; and Petroleum & Coal Products. Furniture & Related Products is the only industry reporting contraction in April.

WHAT RESPONDENTS ARE SAYING …

• “Rapidly rising raw material costs putting extreme pressure on profits.” (Food, Beverage & Tobacco Products)
• “Plastic resin product prices are climbing so fast that [suppliers] are attempting to increase prices on orders already accepted but not [yet] delivered.” (Chemical Products)
• “Customers are rebuilding safety stock levels of inventory, and also trying to buy ahead of material price increases.” (Plastics & Rubber Products)
• “Market continues to get stronger month over month. Recovery is faster than anticipated.” (Transportation Equipment)
• “Pressure from offshore suppliers continues to mount with exchange rate increases and seasonal demand for capacity.” (Miscellaneous Manufacturing)

MANUFACTURING AT A GLANCE APRIL 2011
Index			Series Index April			Series Index March			Percentage Point Change			Direction			Rate of Change			Trend(a) (Months)
PMI			60.4			61.2			-0.8			Growing			Slower			21
New Orders			61.7			63.3			-1.6			Growing			Slower			22
Production			63.8			69.0			-5.2			Growing			Slower			23
Employment			62.7			63.0			-0.3			Growing			Slower			19
Supplier Deliveries			60.2			63.1			-2.9			Slowing			Slower			23
Inventories			53.6			47.4			+6.2			Growing			From Contracting			1
Customers’ Inventories			40.5			39.5			+1.0			Too Low			Slower			25
Prices			85.5			85.0			+0.5			Increasing			Faster			22
Backlog of Orders			61.0			52.5			+8.5			Growing			Faster			4
Exports			62.0			56.0			+6.0			Growing			Faster			22
Imports			55.5			56.5			-1.0			Growing			Slower			20
OVERALL ECONOMY   Manufacturing Sector												Growing			Slower			23
		Growing			Slower			21

(a) Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (8); Aluminum Products (4); Brass (5); Caustic Soda (2); Chemicals (2); Cocoa/Cocoa Powder (3); Copper (9); Copper Based Products (6); Copper Wire; Corn (8); Diesel (5); Electric/Electronic Components (2); Fuel Oils (4); Fuel Surcharges (2); High Density Polyethylene (2); LDPE; Natural Gas; Oils and Lubrication; PET (2); Plastics (4); Plastic Products (4); Plastic Resins (6); Poly Bags; Polyethylene (3); Polyethylene Resin (4); Polypropylene (4); Resins (2); Resin Based Products (2); Rubber (2); Rubber Products (3); Silver (2); Solvents; Stainless Steel (6); Steel (8); Steel — Cold Rolled; Steel — Galvanized; Steel Products (5); Titanium Dioxide; and Transportation Rates (2).

Commodities Down in Price

No commodities are reported down in price.

Commodities in Short Supply

Capacitors; Electric/Electronic Components (4); Nuts — Food; and Titanium Dioxide (2).

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

APRIL 2011 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued its rapid growth in April as the PMI registered 60.4 percent, a decrease of 0.8 percentage point when compared to March’s reading of 61.2 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 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 23rd consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 21st consecutive month. Ore stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through April (61 percent) corresponds to a 6.5 percent increase in real gross domestic product (GDP). In addition, if the PMI for April (60.4 percent) is annualized, it corresponds to a 6.3 percent increase in real GDP annually.”

THE LAST 12 MONTHS

					Month											PMI																Month											PMI
					Apr 2011											60.4																Oct 2010											56.9
					Mar 2011											61.2																Sep 2010											55.3
					Feb 2011											61.4																Aug 2010											55.2
					Jan 2011											60.8																Jul 2010											55.1
					Dec 2010											58.5																Jun 2010											55.3
					Nov 2010											58.2																May 2010											57.8
					Average for 12 months – 58.0 High – 61.4 Low – 55.1

New Orders

ISM’s New Orders Index registered 61.7 percent in April, which is a decrease of 1.6 percentage points when compared to the 63.3 percent reported in March. This is the 22nd consecutive month of growth in the New Orders Index. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The 15 industries reporting growth in new orders in April — listed in order — are: Textile Mills; Primary Metals; Apparel, Leather & Allied Products; Fabricated Metal Products; Transportation Equipment; Wood Products; Paper Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Computer & Electronic Products; Machinery; Chemical Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. The two industries reporting decreases in new orders in April are: Furniture & Related Products; and Nonmetallic Mineral Products.

New Orders						%Better					%Same					%Worse					Net					Index
Apr 2011						49					43					8					+41					61.7
Mar 2011						43					47					10					+33					63.3
Feb 2011						43					46					11					+32					68.0
Jan 2011						46					36					18					+28					67.8

Production

ISM’s Production Index registered 63.8 percent in April, which is a decrease of 5.2 percentage points from the March reading of 69 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 23rd consecutive month the Production Index has registered above 50 percent.

The 14 industries reporting growth in production during the month of April — listed in order — are: Petroleum & Coal Products; Primary Metals; Apparel, Leather & Allied Products; Transportation Equipment; Fabricated Metal Products; Wood Products; Paper Products; Plastics & Rubber Products; Machinery; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Chemical Products; Computer & Electronic Products; and Electrical Equipment, Appliances & Components. The three industries reporting a decrease in production in April are: Furniture & Related Products; Printing & Related Support Activities; and Food, Beverage & Tobacco Products.

Production						%Better					%Same					%Worse					Net					Index
Apr 2011						43					52					5					+38					63.8
Mar 2011						41					52					7					+34					69.0
Feb 2011						43					47					10					+33					66.3
Jan 2011						40					44					16					+24					63.5

Employment

ISM’s Employment Index registered 62.7 percent in April, which is 0.3 percentage point lower than the 63 percent reported in March. This is the 19th consecutive month of growth in manufacturing employment. An Employment Index above 50.1 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, 15 reported growth in employment in April in the following order: Wood Products; Transportation Equipment; Textile Mills; Nonmetallic Mineral Products; Machinery; Computer & Electronic Products; Printing & Related Support Activities; Fabricated Metal Products; Plastics & Rubber Products; Primary Metals; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Paper Products; Chemical Products; and Miscellaneous Manufacturing. Three industries reported no change, and no industries reported a decrease in employment during April.

Employment						%Higher					%Same					%Lower					Net					Index
Apr 2011						34					61					5					+29					62.7
Mar 2011						33					59					8					+25					63.0
Feb 2011						35					56					9					+26					64.5
Jan 2011						24					69					7					+17					61.7

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in April as the Supplier Deliveries Index registered 60.2 percent, which is 2.9 percentage points lower than the 63.1 percent registered in March. This is the 23rd consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.

The 10 industries reporting slower supplier deliveries in April — listed in order — are: Petroleum & Coal Products; Plastics & Rubber Products; Fabricated Metal Products; Transportation Equipment; Primary Metals; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Chemical Products. None of the manufacturing industries reported faster deliveries in April.

Supplier Deliveries						%Slower					%Same					%Faster					Net					Index
Apr 2011						24					73					3					+21					60.2
Mar 2011						26					73					1					+25					63.1
Feb 2011						24					69					7					+17					59.4
Jan 2011						18					77					5					+13					58.6

Inventories

Manufacturers’ inventories increased in April following two months of decline. The Inventories Index registered 53.6 percent, 6.2 percentage points higher than the 47.4 percent recorded for March. An Inventories Index greater than 42.7 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 nine industries reporting higher inventories in April — listed in order — are: Wood Products; Plastics & Rubber Products; Fabricated Metal Products; Apparel, Leather & Allied Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Machinery; Electrical Equipment, Appliances & Components; and Transportation Equipment. The six industries reporting decreases in inventories in April — listed in order — are: Petroleum & Coal Products; Primary Metals; Paper Products; Miscellaneous Manufacturing; Chemical Products; and Nonmetallic Mineral Products.

Inventories						%Higher					%Same					%Lower					Net					Index
Apr 2011						27					55					18					+9					53.6
Mar 2011						19					60					21					-2					47.4
Feb 2011						19					63					18					+1					48.8
Jan 2011						25					54					21					+4					52.4

Customers’ Inventories(b)

The ISM Customers’ Inventories Index registered 40.5 percent in April, 1 percentage point higher than in March when the index registered 39.5 percent. This is the 25th 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 April are: Paper Products and Fabricated Metal Products. The seven industries reporting customers’ inventories as too low during April — listed in order — are: Primary Metals; Computer & Electronic Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Machinery; and Chemical Products. Nine industries reported no change in customers' inventories for the month of April compared to March.

Customers’ Inventories						% Reporting			%Too High			%About Right			%Too Low			Net			Index
Apr 2011						73			9			63			28			-19			40.5
Mar 2011						62			11			57			32			-21			39.5
Feb 2011						66			7			66			27			-20			40.0
Jan 2011						63			11			69			20			-9			45.5

Prices(b)

The ISM Prices Index registered 85.5 percent in April, 0.5 percentage point higher than the 85 percent reported in March and the highest reading since July 2008 when the index registered 88.5 percent. This is the 22nd consecutive month the Prices Index has registered above 50 percent. While 72 percent of respondents reported paying higher prices and 1 percent reported paying lower prices, 27 percent of supply executives reported paying the same prices as in March. A Prices Index above 49.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.

Of the 18 manufacturing industries, 17 report paying increased prices during the month of April, in the following order: Textile Mills; Printing & Related Support Activities; Plastics & Rubber Pro