Dépêches
October Manufacturing ISM Report On Business®; PMI at 50.8%; New Orders, Production and Employment Growing; Supplier Deliveries Slowing; Inventories Contracting
Dépèche transmise le 1 novembre 2011 par Business Wire
TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in October for the 27th consecutive month, and the overall economy grew for the 29th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
“Business is very strong, both domestically and internationally.”
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 50.8 percent, a decrease of 0.8 percentage point from September’s reading of 51.6 percent, indicating expansion in the manufacturing sector for the 27th consecutive month. The New Orders Index increased 2.8 percentage points from September to 52.4 percent, indicating a return to growth after three months of contraction. The Prices Index, at 41 percent, dropped 15 percentage points, and is below the 50 percent mark for the first time since May 2009 when it registered 43.5 percent. Inventories decreased to 46.7 percent, which is 5.3 percentage points below the September reading of 52 percent. Comments from respondents are mixed, indicating positive relief from raw materials pricing and continuing strength in a few industries, but there is also more concern and caution about growth in this uncertain economy.”
PERFORMANCE BY INDUSTRY
Of the 18 manufacturing industries, eight are reporting growth in October, in the following order: Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Paper Products; and Machinery. The six industries reporting contraction in October — listed in order — are: Plastics & Rubber Products; Chemical Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing.
WHAT RESPONDENTS ARE SAYING …
- “Starting to see some deflation on raw materials.” (Chemical Products)
- “Overall industry volumes remain flat vs. previous month. Uncertainty in supply chain is increasing due to lower volumes vs. historical.” (Electrical Equipment, Appliances & Components)
- “International: contraction in demand for our products is driving mitigation of excess material on order. Contract manufacturers are adjusting their resources accordingly.” (Machinery)
- “Business is very strong, both domestically and internationally.” (Fabricated Metal Products)
- “With metal prices declining, we are seeing some short-term forecast strength. If metal pricing increases again, this strength is expected to disappear again.” (Primary Metals)
- “Auto industry still strong.” (Transportation Equipment)
- “Business is slowing — not crashing — but uncertainty and caution is the order of the day.” (Plastics & Rubber Products)
- “Retail branded business is slower than expected due to consumers continuing to move to private label- and store-brand products for price advantage. Raw material supplies are in good shape, but prices are staying stubbornly higher than expected.” (Food, Beverage & Tobacco Products)
MANUFACTURING AT A GLANCE |
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Index |
Series |
Series |
Percentage |
Direction |
Rate of |
Trend(a) |
||||||||||||
PMI | 50.8 | 51.6 | -0.8 | Growing | Slower | 27 | ||||||||||||
New Orders | 52.4 | 49.6 | +2.8 | Growing | From Contacting | 1 | ||||||||||||
Production | 50.1 | 51.2 | -1.1 | Growing | Slower | 2 | ||||||||||||
Employment | 53.5 | 53.8 | -0.3 | Growing | Slower | 25 | ||||||||||||
Supplier Deliveries | 51.3 | 51.4 | -0.1 | Slowing | Slower | 29 | ||||||||||||
Inventories | 46.7 | 52.0 | -5.3 | Contracting | From Growing | 1 | ||||||||||||
Customers’ Inventories | 43.5 | 49.0 | -5.5 | Too Low | Faster | 31 | ||||||||||||
Prices | 41.0 | 56.0 | -15.0 | Decreasing | From Increasing | 1 | ||||||||||||
Backlog of Orders | 47.5 | 41.5 | +6.0 | Contracting | Slower | 5 | ||||||||||||
Exports | 50.0 | 53.5 | -3.5 | Unchanged | From Growing | 1 | ||||||||||||
Imports | 49.5 | 54.5 | -5.0 | Contracting | From Growing | 1 | ||||||||||||
OVERALL ECONOMY
Manufacturing Sector |
Growing | Slower | 29 | |||||||||||||||
Growing | Slower | 27 |
(a) Number of months moving in current direction
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum Products(b) (3); Caustic Soda; Copper(b); Steel(b) (14); and Titanium Dioxide (2).
Commodities Down in Price
Alloy Metals; Aluminum (2); Aluminum Products(b) (2); Copper(b) (3); Copper Based Products; Corn; Diesel Fuel; Natural Gas (3); Nickel; Plastic Resins (3); Steel(b) (6); and Steel Products.
Commodities in Short Supply
Castings (2) 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.
OCTOBER 2011 MANUFACTURING INDEX SUMMARIES
PMI
Manufacturing continued its growth in October as the PMI registered 50.8 percent, a decrease of 0.8 percentage point when compared to September’s reading of 51.6 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 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 29th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 27th consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through October (55.7 percent) corresponds to a 4.6 percent increase in real gross domestic product (GDP). In addition, if the PMI for October (50.8 percent) is annualized, it corresponds to a 2.9 percent increase in real GDP annually.”
THE LAST 12 MONTHS
Month | PMI | Month | PMI | |||||||||||||||||||||||||
Oct 2011 | 50.8 | Apr 2011 | 60.4 | |||||||||||||||||||||||||
Sep 2011 | 51.6 | Mar 2011 | 61.2 | |||||||||||||||||||||||||
Aug 2011 | 50.6 | Feb 2011 | 61.4 | |||||||||||||||||||||||||
Jul 2011 | 50.9 | Jan 2011 | 60.8 | |||||||||||||||||||||||||
Jun 2011 | 55.3 | Dec 2010 | 58.5 | |||||||||||||||||||||||||
May 2011 | 53.5 | Nov 2010 | 58.2 | |||||||||||||||||||||||||
Average for 12 months – 56.1 |
New Orders
ISM’s New Orders Index registered 52.4 percent in October, which is an increase of 2.8 percentage points when compared to the September reading of 49.6 percent, and represents a return to growth after three consecutive months of contraction. 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 eight industries reporting growth in new orders in October — listed in order — are: Petroleum & Coal Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Primary Metals; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing. The nine industries reporting decreases in new orders in October — listed in order — are: Wood Products; Textile Mills; Chemical Products; Furniture & Related Products; Printing & Related Support Activities; Paper Products; Transportation Equipment; Machinery; and Apparel, Leather & Allied Products.
New Orders | %Better | %Same | %Worse | Net | Index | |||||||||||||||||||||
Oct 2011 | 22 | 53 | 25 | -3 | 52.4 | |||||||||||||||||||||
Sep 2011 | 23 | 53 | 24 | -1 | 49.6 | |||||||||||||||||||||
Aug 2011 | 22 | 53 | 25 | -3 | 49.6 | |||||||||||||||||||||
Jul 2011 | 24 | 53 | 23 | +1 | 49.2 |
Production
ISM’s Production Index registered 50.1 percent in October, which is a decrease of 1.1 percentage points when compared to the September reading of 51.2 percent, and indicates growth for the second consecutive month. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The eight industries reporting growth in production during the month of October — listed in order — are: Wood Products; Primary Metals; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Paper Products; Computer & Electronic Products; and Miscellaneous Manufacturing. The nine industries reporting a decrease in production in October — listed in order — are: Plastics & Rubber Products; Textile Mills; Furniture & Related Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Chemical Products; Transportation Equipment; Machinery; and Apparel, Leather & Allied Products.
Production | %Better | %Same | %Worse | Net |
Index |
|||||||||||||||||||||
Oct 2011 | 21 | 59 | 20 | +1 | 50.1 | |||||||||||||||||||||
Sep 2011 | 23 | 56 | 21 | +2 | 51.2 | |||||||||||||||||||||
Aug 2011 | 19 | 62 | 19 | 0 | 48.6 | |||||||||||||||||||||
Jul 2011 | 22 | 60 | 18 | +4 | 52.3 |
Employment
ISM’s Employment Index registered 53.5 percent in October, which is 0.3 percentage point lower than the 53.8 percent reported in September. This is the 25th consecutive month the Employment Index has been above 50 percent. 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, eight reported growth in employment in October in the following order: Textile Mills; Primary Metals; Fabricated Metal Products; Petroleum & Coal Products; Transportation Equipment; Paper Products; Machinery; and Computer & Electronic Products. The six industries reporting a decrease in employment in October — listed in order — are: Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Chemical Products; Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products.
Employment | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
Oct 2011 | 22 | 63 | 15 | +7 | 53.5 | |||||||||||||||||||||
Sep 2011 | 22 | 62 | 16 | +6 | 53.8 | |||||||||||||||||||||
Aug 2011 | 22 | 63 | 15 | +7 | 51.8 | |||||||||||||||||||||
Jul 2011 | 24 | 63 | 13 | +11 | 53.5 |
Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was slower in October as the Supplier Deliveries Index registered 51.3 percent, which is 0.1 percentage point lower than the 51.4 percent registered in September. This is the 29th consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.
The five industries reporting slower supplier deliveries in October are: Furniture & Related Products; Computer & Electronic Products; Transportation Equipment; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The five industries reporting faster deliveries in October are: Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Chemical Products; and Machinery. Eight industries reported no change in supplier deliveries in October compared to September.
Supplier Deliveries | %Slower | %Same | %Faster | Net | Index | |||||||||||||||||||||
Oct 2011 | 10 | 81 | 9 | +1 | 51.3 | |||||||||||||||||||||
Sep 2011 | 12 | 81 | 7 | +5 | 51.4 | |||||||||||||||||||||
Aug 2011 | 12 | 81 | 7 | +5 | 50.6 | |||||||||||||||||||||
Jul 2011 | 13 | 80 | 7 | +6 | 50.4 |
Inventories
The Inventories Index registered 46.7 percent in October, 5.3 percentage points lower than the 52 percent reported in September. 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 five industries reporting higher inventories in October are: Textile Mills; Furniture & Related Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Machinery. The 11 industries reporting decreases in inventories in October — listed in order — are: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Primary Metals; Chemical Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Transportation Equipment; Fabricated Metal Products; Plastics & Rubber Products; and Paper Products.
Inventories | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
Oct 2011 | 17 | 59 | 24 | -7 | 46.7 | |||||||||||||||||||||
Sep 2011 | 23 | 58 | 19 | +4 | 52.0 | |||||||||||||||||||||
Aug 2011 | 23 | 63 | 14 | +9 | 52.3 | |||||||||||||||||||||
Jul 2011 | 18 | 60 | 22 | -4 | 49.3 |
Customers’ Inventories(c)
The ISM Customers’ Inventories Index registered 43.5 percent in October, 5.5 percentage points lower than in September when the index registered 49 percent. This is the 31st 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 five manufacturing industries reporting customers’ inventories as being too high during October are: Apparel, Leather & Allied Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Chemical Products. The 11 industries reporting customers’ inventories as too low during October — listed in order — are: Primary Metals; Nonmetallic Mineral Products; Petroleum & Coal Products; Textile Mills; Miscellaneous Manufacturing; Plastics & Rubber Products; Transportation Equipment; Machinery; Paper Products; Computer & Electronic Products; and Fabricated Metal Products.
Customers’ Inventories |
% |
%Too |
%About |
%Too |
Net | Index | |||||||||||||||
Oct 2011 | 71 | 12 | 63 | 25 | -13 | 43.5 | |||||||||||||||
Sep 2011 | 73 | 17 | 64 | 19 | -2 | 49.0 | |||||||||||||||
Aug 2011 | 73 | 15 | 63 | 22 | -7 | 46.5 | |||||||||||||||
Jul 2011 | 72 | 11 | 66 | 23 | -12 | 44.0 |
Prices(c)
The ISM Prices Index registered 41 percent in October, 15 percentage points lower than the 56 percent reported in September. This is the sixth consecutive month the Prices Index has registered below 80 percent since December 2010, and is the first month of contraction since May 2009 when the index registered 43.5 percent. The last time the Prices Index decreased more than 15 percentage points was in June 2010, when it registered 57 percent compared to the prior month’s reading of 77.5 percent. In October, 14 percent of respondents reported paying higher prices, 32 percent reported paying lower prices and 54 percent of supply executives reported paying the same prices as in September. 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, only two report paying increased prices during the month of October: Furniture & Related Products; and Computer & Electronic Products. The 13 industries reporting paying lower prices on average during the month of October — listed in order — are: Plastics & Rubber Products; Primary Metals; Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Transportation Equipment; Food, Beverage & Tobacco Products; Machinery; Petroleum & Coal Products; Printing & Related Support Activities; Chemical Products; Paper Products; Miscellaneous Manufacturing; and Fabricated Metal Products.