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May Manufacturing ISM Report On Business®; PMI at 53.5%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Contracting

Dépèche transmise le 1 juin 2011 par Business Wire

May Manufacturing ISM Report On Business®; PMI at 53.5%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Contracting

May Manufacturing ISM Report On Business®; PMI at 53.5%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Contracting

TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in May for the 22nd consecutive month, and the overall economy grew for the 24th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

“Demand remains strong; however, inflation is evident everywhere in virtually every material purchased.”

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI registered 53.5 percent and indicates expansion in the manufacturing sector for the 22nd consecutive month. This month’s index, however, registered 6.9 percentage points below the April reading of 60.4 percent, and is the first reading below 60 percent for 2011, as well as the lowest PMI reported for the past 12 months. Slower growth in new orders and production are the primary contributors to this month’s lower PMI reading. Manufacturing employment continues to show good momentum for the year, as the Employment Index registered 58.2 percent, which is 4.5 percentage points lower than the 62.7 percent reported in April. Manufacturers continue to experience significant cost pressures from commodities and other inputs.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 14 are reporting growth in May, in the following order: Nonmetallic Mineral Products; Petroleum & Coal Products; Machinery; Transportation Equipment; Computer & Electronic Products; Textile Mills; Electrical Equipment, Appliances & Components; Primary Metals; Miscellaneous Manufacturing; Paper Products; Chemical Products; Plastics & Rubber Products; Apparel, Leather & Allied Products; and Fabricated Metal Products. The three industries reporting contraction in May are: Printing & Related Support Activities; Furniture & Related Products; and Food, Beverage & Tobacco Products.

WHAT RESPONDENTS ARE SAYING …

  • “Chemical prices are under increasing cost pressure, driven by feedstock and transportation costs.” (Chemical Products)
  • “Continued growth through beginning of second quarter, with strong backlog and outlook for at least the next three months.” (Electrical Equipment, Appliances & Components)
  • “Business levels remain strong — better than last year by 20+ percent, but not back to 2008 or early 2009 levels.” (Fabricated Metal Products)
  • “Demand remains strong; however, inflation is evident everywhere in virtually every material purchased.” (Paper Products)
  • “Bad weather is impacting retail business.” (Printing & Related Support Activities)
  • “Business is still strong, but we are more aware of a possible softening than previously.” (Machinery)

MANUFACTURING AT A GLANCE

MAY 2011

                       
Index

Series
Index
May

Series
Index
April

Percentage
Point
Change

Direction

Rate of
Change

Trend(a)
(Months)

 
PMI 53.5 60.4 -6.9 Growing Slower 22
New Orders 51.0 61.7 -10.7 Growing Slower 23
Production 54.0 63.8 -9.8 Growing Slower 24
Employment 58.2 62.7 -4.5 Growing Slower 20
Supplier Deliveries 55.7 60.2 -4.5 Slowing Slower 24
Inventories 48.7 53.6 -4.9 Contracting From Growing 1
Customers’ Inventories 39.5 40.5 -1.0 Too Low Faster 26
Prices 76.5 85.5 -9.0 Increasing Slower 23
Backlog of Orders 50.5 61.0 -10.5 Growing Slower 5
Exports 55.0 62.0 -7.0 Growing Slower 23
Imports 54.5 55.5 -1.0 Growing Slower 21
OVERALL ECONOMY

 

Manufacturing Sector

Growing Slower 24
Growing Slower 22

(a) Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Adhesives; Aluminum (9); Aluminum Products (5); Brass Products; Butadiene; Caustic Soda (3); Chemicals (3); Cocoa/Cocoa Powder (4); Copper(b) (10); Copper Based Products (7); Diesel (6); Electric/Electronic Components (3); Foam; Fuel Oils (5); Fuel Surcharges (3); Gasoline; Glycol Ether; High Density Polyethylene (3); Nickel Products; Oils and Lubricants (2); Packaging Materials; Paper; Petroleum Based Products; Plastics (5); Plastic Products (5); Polypropylene (5); Polypropylene Resins; Propylene Glycol; Resins (3); Rubber Products (4); Shrink Wrap Film; Silver (3); Stainless Steel (7); Steel(b) (9); Steel — Cold Rolled (2); Steel Products (6); and Titanium Dioxide (2).

Commodities Down in Price

Copper(b); and Steel(b).

Commodities in Short Supply

Electric/Electronic Components (5); Nylon/Nylon Polymer; Resins; Rubber Products; and Titanium Dioxide (3).

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

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

MAY 2011 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued its growth in May as the PMI registered 53.5 percent, a decrease of 6.9 percentage points when compared to April’s reading of 60.4 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 24th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 22nd consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through May (59.5 percent) corresponds to a 5.9 percent increase in real gross domestic product (GDP). In addition, if the PMI for May (53.5 percent) is annualized, it corresponds to a 3.8 percent increase in real GDP annually.”

THE LAST 12 MONTHS

          Month                     PMI                             Month                     PMI
 
May 2011 53.5 Nov 2010 58.2
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

Average for 12 months – 57.7
High – 61.4
Low – 53.5

New Orders

ISM’s New Orders Index registered 51 percent in May, which is a decrease of 10.7 percentage points when compared to the 61.7 percent reported in April. This is the 23rd 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 11 industries reporting growth in new orders in May — listed in order — are: Nonmetallic Mineral Products; Petroleum & Coal Products; Paper Products; Transportation Equipment; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Primary Metals; Miscellaneous Manufacturing; Chemical Products; Machinery; and Fabricated Metal Products. The four industries reporting decreases in new orders in May are: Furniture & Related Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; and Computer & Electronic Products.

New Orders           %Better         %Same         %Worse         Net         Index
 

May 2011

30 54 16 +14 51.0
Apr 2011 49 43 8 +41 61.7
Mar 2011 43 47 10 +33 63.3
Feb 2011 43 46 11 +32 68.0

Production

ISM’s Production Index registered 54 percent in May, which is a decrease of 9.8 percentage points when compared to the April reading of 63.8 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 24th consecutive month the Production Index has registered above 50 percent.

The 12 industries reporting growth in production during the month of May — listed in order — are: Plastics & Rubber Products; Nonmetallic Mineral Products; Petroleum & Coal Products; Paper Products; Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Machinery; Primary Metals; Miscellaneous Manufacturing; Fabricated Metal Products; Transportation Equipment; and Computer & Electronic Products. The four industries reporting a decrease in production in May are: Furniture & Related Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; and Chemical Products.

Production           %Better         %Same         %Worse         Net         Index
 
May 2011 30 56 14 +16 54.0
Apr 2011 43 52 5 +38 63.8
Mar 2011 41 52 7 +34 69.0
Feb 2011 43 47 10 +33 66.3

Employment

ISM’s Employment Index registered 58.2 percent in May, which is 4.5 percentage points lower than the 62.7 percent reported in April. This is the 20th 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, 11 reported growth in employment in May in the following order: Textile Mills; Nonmetallic Mineral Products; Computer & Electronic Products; Transportation Equipment; Machinery; Primary Metals; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Chemical Products; and Fabricated Metal Products. The two industries reporting a decrease in employment are: Electrical Equipment, Appliances & Components; and Petroleum & Coal Products. Five industries reported no change in employment in May compared to April.

Employment           %Higher         %Same         %Lower         Net         Index
 
May 2011 31 60 9 +22 58.2
Apr 2011 34 61 5 +29 62.7
Mar 2011 33 59 8 +25 63.0
Feb 2011 35 56 9 +26 64.5

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in May as the Supplier Deliveries Index registered 55.7 percent, which is 4.5 percentage points lower than the 60.2 percent registered in April. This is the 24th consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.

The seven industries reporting slower supplier deliveries in May — listed in order — are: Textile Mills; Machinery; Chemical Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Computer & Electronic Products; and Miscellaneous Manufacturing. The four industries reporting faster deliveries in May are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Plastics & Rubber Products; and Fabricated Metal Products.

Supplier Deliveries           %Slower         %Same         %Faster         Net         Index
 
May 2011 22 70 8 +14 55.7
Apr 2011 24 73 3 +21 60.2
Mar 2011 26 73 1 +25 63.1
Feb 2011 24 69 7 +17 59.4

Inventories

Manufacturers’ inventories contracted in May for the third time in the past four months. The Inventories Index registered 48.7 percent, 4.9 percentage points lower than the 53.6 percent reported in April. 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 three industries reporting higher inventories in May are: Computer & Electronic Products; Miscellaneous Manufacturing; and Machinery. The 10 industries reporting decreases in inventories in May — listed in order — are: Textile Mills; Furniture & Related Products; Paper Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Transportation Equipment; Fabricated Metal Products; Electrical Equipment, Appliances & Components; and Apparel, Leather & Allied Products.

Inventories           %Higher         %Same         %Lower         Net         Index
 
May 2011 20 57 23 -3 48.7
Apr 2011 27 55 18 +9 53.6
Mar 2011 19 60 21 -2 47.4
Feb 2011 19 63 18 +1 48.8

Customers’ Inventories(c)

The ISM Customers’ Inventories Index registered 39.5 percent in May, 1 percentage point lower than in April when the index registered 40.5 percent. This is the 26th 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 only manufacturing industry reporting customers’ inventories as being too high during May is Food, Beverage & Tobacco Products. The 10 industries reporting customers’ inventories as too low during May — listed in order — are: Plastics & Rubber Products; Primary Metals; Textile Mills; Computer & Electronic Products; Nonmetallic Mineral Products; Petroleum & Coal Products; Machinery; Chemical Products; Electrical Equipment, Appliances & Components; and Transportation Equipment. Seven industries reported no change in customers’ inventories for the month of May compared to April.

Customers’ Inventories          

%
Reporting

   

%Too
High

   

%About
Right

   

%Too
Low

    Net     Index
 
May 2011 72 6 67 27 -21 39.5
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

Prices(c)

The ISM Prices Index registered 76.5 percent in May, 9 percentage points lower than the 85.5 percent reported in April. This is the first time the Prices Index has registered below 80 percent since December 2010, and is the 23rd consecutive month the index has registered above 50 percent. While 58 percent of respondents reported paying higher prices and 5 percent reported paying lower prices, 37 percent of supply executives reported paying the same prices as in April. 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, 15 report paying increased prices during the month of May, in the following order: Nonmetallic Mineral Products; Chemical Products; Paper Products; Machinery; Apparel, Leather & Allied Products; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Computer & Ele

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