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June Manufacturing ISM Report On Business®; PMI at 55.3%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Growing

Dépèche transmise le 1 juillet 2011 par Business Wire

June Manufacturing ISM Report On Business®; PMI at 55.3%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Growing

June Manufacturing ISM Report On Business®; PMI at 55.3%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Growing

TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in June for the 23rd consecutive month, and the overall economy grew for the 25th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

“High commodity prices continue to be worrisome.”

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 55.3 percent, an increase of 1.8 percentage points from May, indicating expansion in the manufacturing sector for the 23rd consecutive month. New orders and production were both modestly up from last month, and employment showed continued strength with an increase of 1.7 percentage points to 59.9 percent. The rate of increase in prices slowed for the second consecutive month, dropping 8.5 percentage points in June to 68 percent. This follows a similar reduction of 9 percentage points in the Prices Index in May, and is the lowest figure since August 2010 when the index registered 61.5 percent. While the rate of price increases has slowed and the list of commodities up in price has shortened, commodity and input prices continue to be a concern across several industries.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 12 are reporting growth in June, in the following order: Miscellaneous Manufacturing; Printing & Related Support Activities; Computer & Electronic Products; Paper Products; Textile Mills; Petroleum & Coal Products; Nonmetallic Mineral Products; Transportation Equipment; Chemical Products; Fabricated Metal Products; Machinery; and Electrical Equipment, Appliances & Components. The five industries reporting contraction in June are: Plastics & Rubber Products; Apparel, Leather & Allied Products; Primary Metals; Wood Products; and Food, Beverage & Tobacco Products.

WHAT RESPONDENTS ARE SAYING …

  • “We continue to see inflation, though at a reduced rate [compared] to earlier months.” (Chemical Products)
  • “Slight slowdown in overall business in both domestic and international markets, although still above 2010 at the same time.” (Electrical Equipment, Appliances & Components)
  • “The earthquake and related issues in Japan have caused shortages of some automotive equipment, negatively impacting global automotive production.” (Fabricated Metal Products)
  • “Sales continue to be stronger than expected across both retail and industrial channels. Material costs are definitely rising and will force increases to end-use customers.” (Paper Products)
  • “High commodity prices continue to be worrisome.” (Food, Beverage & Tobacco Products)
  • “Business is still up and down, with no real upside potential for us until the housing market rebounds.” (Furniture & Related Products)
  • “Customers are still being cautious with their buying. Certain plastics and metal prices continue to rise.” (Machinery)

MANUFACTURING AT A GLANCE
JUNE 2011

                       
Index

Series
Index
Jun

Series
Index
May

Percentage
Point
Change

Direction

Rate of
Change

Trend(a)
(Months)

 
PMI 55.3 53.5 +1.8 Growing Faster 23
New Orders 51.6 51.0 +0.6 Growing Faster 24
Production 54.5 54.0 +0.5 Growing Faster 25
Employment 59.9 58.2 +1.7 Growing Faster 21
Supplier Deliveries 56.3 55.7 +0.6 Slowing Faster 25
Inventories 54.1 48.7 +5.4 Growing From Contracting 1
Customers’ Inventories 47.0 39.5 +7.5 Too Low Slower 27
Prices 68.0 76.5 -8.5 Increasing Slower 24
Backlog of Orders 49.0 50.5 -1.5 Contracting From Growing 1
Exports 53.5 55.0 -1.5 Growing Slower 24
Imports 51.0 54.5 -3.5 Growing Slower 22
OVERALL ECONOMY

 

Manufacturing Sector

Growing Faster 25
Growing Faster 23

(a) Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (10); Castings; Caustic Soda (4); Copper(b) (11); Copper Based Products(b) (8); Corn; Natural Gas; Packaging Materials (2); Plastic Products (6); Plastics (6); Polyethylene; Polypropylene (6); Resins (4); Rubber Products (5); Soybean Oil; Steel(b) (10); Steel Products (7); Steel Tube; and Titanium Dioxide (3).

Commodities Down in Price

Copper(b) (2); Copper Based Products(b); Nickel; Stainless Steel; and Steel(b) (2).

Commodities in Short Supply

Capacitors; Electric/Electronic Components (6); and Rubber Products (2).

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

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

JUNE 2011 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued its growth in June as the PMI registered 55.3 percent, an increase of 1.8 percentage points when compared to May’s reading of 53.5 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 25th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 23rd consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through June (58.8 percent) corresponds to a 5.7 percent increase in real gross domestic product (GDP). In addition, if the PMI for June (55.3 percent) is annualized, it corresponds to a 4.5 percent increase in real GDP annually.”

THE LAST 12 MONTHS

          Month                     PMI                             Month                     PMI
 
Jun 2011 55.3 Dec 2010 58.5
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

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

New Orders

ISM’s New Orders Index registered 51.6 percent in June, which is an increase of 0.6 percentage point when compared to the 51 percent reported in May. This is the 24th 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 10 industries reporting growth in new orders in June — listed in order — are: Textile Mills; Petroleum & Coal Products; Paper Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Transportation Equipment; Fabricated Metal Products; Chemical Products; and Computer & Electronic Products. The seven industries reporting decreases in new orders in June — listed in order — are: Plastics & Rubber Products; Apparel, Leather & Allied Products; Wood Products; Primary Metals; Food, Beverage & Tobacco Products; Machinery; and Nonmetallic Mineral Products.

New Orders           %Better         %Same         %Worse         Net         Index
 
Jun 2011 34 43 23 +11 51.6
May 2011 30 54 16 +14 51.0
Apr 2011 49 43 8 +41 61.7
Mar 2011 43 47 10 +33 63.3

Production

ISM’s Production Index registered 54.5 percent in June, which is an increase of 0.5 percentage point when compared to the May reading of 54 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 25th consecutive month the Production Index has registered above 50 percent.

The 10 industries reporting growth in production during the month of June — listed in order — are: Paper Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Electrical Equipment, Appliances & Components; Chemical Products; Computer & Electronic Products; and Transportation Equipment. The three industries reporting a decrease in production in June are: Plastics & Rubber Products; Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products. Five industries reported no change in production in June compared to May.

Production           %Better         %Same         %Worse         Net         Index
 
Jun 2011 35 46 19 +16 54.5
May 2011 30 56 14 +16 54.0
Apr 2011 43 52 5 +38 63.8
Mar 2011 41 52 7 +34 69.0

Employment

ISM’s Employment Index registered 59.9 percent in June, which is 1.7 percentage points higher than the 58.2 percent reported in May. This is the 21st 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 June in the following order: Textile Mills; Nonmetallic Mineral Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Computer & Electronic Products; Transportation Equipment; Chemical Products; Machinery; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Paper Products. The only industry reporting a decrease in employment in June is Apparel, Leather & Allied Products. Six industries reported no change in employment in June compared to May.

Employment           %Higher         %Same         %Lower         Net         Index
 
Jun 2011 34 56 10 +24 59.9
May 2011 31 60 9 +22 58.2
Apr 2011 34 61 5 +29 62.7
Mar 2011 33 59 8 +25 63.0

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in June as the Supplier Deliveries Index registered 56.3 percent, which is 0.6 percentage point higher than the 55.7 percent registered in May. This is the 25th 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 June — listed in order — are: Petroleum & Coal Products; Transportation Equipment; Miscellaneous Manufacturing; Machinery; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Chemical Products; and Fabricated Metal Products. The only industry reporting faster deliveries in June is Primary Metals. Nine industries reported no change in supplier deliveries in June compared to May.

Supplier Deliveries           %Slower         %Same         %Faster         Net         Index
 
Jun 2011 18 78 4 +14 56.3
May 2011 22 70 8 +14 55.7
Apr 2011 24 73 3 +21 60.2
Mar 2011 26 73 1 +25 63.1

Inventories

The Inventories Index registered 54.1 percent in June, 5.4 percentage points higher than the 48.7 percent reported in May. 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 six industries reporting higher inventories in June — listed in order — are: Computer & Electronic Products; Electrical Equipment, Appliances & Components; Machinery; Chemical Products; Fabricated Metal Products; and Miscellaneous Manufacturing. The five industries reporting decreases in inventories in June are: Textile Mills; Apparel, Leather & Allied Products; Petroleum & Coal Products; Paper Products; and Transportation Equipment. Seven industries reported no change in inventories in June compared to May.

Inventories           %Higher         %Same         %Lower         Net         Index
 
Jun 2011 23 61 16 +7 54.1
May 2011 20 57 23 -3 48.7
Apr 2011 27 55 18 +9 53.6
Mar 2011 19 60 21 -2 47.4

Customers’ Inventories(c)

The ISM Customers’ Inventories Index registered 47 percent in June, 7.5 percentage points higher than in May when the index registered 39.5 percent. This is the 27th 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 four manufacturing industries reporting customers’ inventories as being too high during June are: Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; and Food, Beverage & Tobacco Products. The eight industries reporting customers’ inventories as too low during June — listed in order — are: Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Paper Products; Computer & Electronic Products; Transportation Equipment; and Machinery. Six industries reported no change in customers’ inventories for the month of June compared to May.

Customers’ Inventories          

%
Reporting

   

%Too
High

   

%About
Right

   

%Too
Low

    Net     Index
 
Jun 2011 70 13 68 19 -6 47.0
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

Prices(c)

The ISM Prices Index registered 68 percent in June, 8.5 percentage points lower than the 76.5 percent reported in May. This is the second consecutive month the Prices Index has registered below 80 percent since December 2010, and is the 24th consecutive month the index has registered above 50 percent. While 48 percent of respondents reported paying higher prices and 12 percent reported paying lower prices, 40 percent of supply executives reported paying the same prices as in May. 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, 13 report paying increased prices during the month of June, in the following order: Textile Mills; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Paper Products; Furniture & Related Products; Chemical Products; Petroleum & Coal Products; Machinery; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; and Transportation Equipment. The two manuf

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