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November Manufacturing ISM Report On Business®; PMI at 52.7%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

Dépèche transmise le 1 décembre 2011 par Business Wire

November Manufacturing ISM Report On Business®; PMI at 52.7%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

November Manufacturing ISM Report On Business®; PMI at 52.7%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in November for the 28th consecutive month, and the overall economy grew for the 30th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

“Business still holding its own. Some growth in margin now that some of the raw materials prices have abated. Oil is pushing $100 so that has not been favorable.”

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 52.7 percent, an increase of 1.9 percentage points from October’s reading of 50.8 percent, indicating expansion in the manufacturing sector for the 28th consecutive month. The New Orders Index increased 4.3 percentage points from October to 56.7 percent, reflecting the second month of growth after three months of contraction. While the Prices Index, at 45 percent, increased 4 percentage points from the October reading of 41 percent, prices of raw materials continued to decrease (registering below 50 percent) for the second consecutive month. Respondents cite continuing concerns about the general economic environment, government regulations and European financial conditions, but are cautiously more optimistic about the next few months based on lower raw materials pricing and favorable levels of new orders.”

PERFORMANCE BY INDUSTRY

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

WHAT RESPONDENTS ARE SAYING …

  • “Business still holding its own. Some growth in margin now that some of the raw materials prices have abated. Oil is pushing $100 so that has not been favorable.” (Chemical Products)
  • “Orders for the remaining two months have increased after an extended ‘summer dip’ in sales overall. We expect to finish the year approximately 10 percent above 2010.” (Electrical Equipment, Appliances & Components)
  • “Seeing a slight slowdown in orders; could be related to the holidays.” (Primary Metals)
  • “Material lead times are getting longer. Seems like no one is hiring. Trying to do twice the output with the same amount of people.” (Food, Beverage & Tobacco Products)
  • “Japanese auto production has returned to 100 percent, and domestic manufacturing continues to increase.” (Fabricated Metal Products)
  • “Oil exploration seems to be really picking up. Government is permitting again, so business is the busiest we’ve ever seen.” (Computer & Electronic Products)
  • “The EPS ruling about higher fees for coal-generated electricity can have a huge, negative impact on our business if implemented in January 2012. We are at the peak of our seasonal demand push.” (Plastics & Rubber Products)
  • “Thailand flood impacting our business. Honda and Toyota cut production forecasts, and we are chasing some components made in Thailand.” (Transportation Equipment)

MANUFACTURING AT A GLANCE
NOVEMBER 2011

                       
Index

Series
Index
Nov

Series
Index
Oct

Percentage
Point
Change

Direction

Rate of
Change

Trend(a)
(Months)

 
PMI 52.7 50.8 +1.9 Growing Faster 28
New Orders 56.7 52.4 +4.3 Growing Faster 2
Production 56.6 50.1 +6.5 Growing Faster 3
Employment 51.8 53.5 -1.7 Growing Slower 26
Supplier Deliveries 49.9 51.3 -1.4 Faster From Slowing 1
Inventories 48.3 46.7 +1.6 Contracting Slower 2
Customers’ Inventories 50.0 43.5 +6.5 Unchanged From Too Low 1
Prices 45.0 41.0 +4.0 Decreasing Slower 2
Backlog of Orders 45.0 47.5 -2.5 Contracting Faster 6
Exports 52.0 50.0 +2.0 Growing From Unchanged 1
Imports 49.0 49.5 -0.5 Contracting Faster 2
OVERALL ECONOMY

 

Manufacturing Sector

Growing Faster 30
Growing Faster 28

(a) Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum Products (4); Caustic Soda (2); Copper(b) (2); Copper Based Products; Corn Syrup; Electronic Components; Oil; Paper; and Plastic Resins(b).

Commodities Down in Price

Aluminum (3); Cardboard Products; Copper(b) (4); Corn (2); Natural Gas (4); Plastic Resins(b) (4); Plastic Products; Polypropylene; Stainless Steel; and Steel (7).

Commodities in Short Supply

Castings (3); Electronic Components; and Hydraulic Equipment.

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

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

NOVEMBER 2011 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued its growth in November as the PMI registered 52.7 percent, an increase of 1.9 percentage points when compared to October’s reading of 50.8 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 30th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 28th consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (55.4 percent) corresponds to a 4.5 percent increase in real gross domestic product (GDP). In addition, if the PMI for November (52.7 percent) is annualized, it corresponds to a 3.6 percent increase in real GDP annually.”

THE LAST 12 MONTHS

          Month           PMI                     Month           PMI
 
Nov 2011 52.7 May 2011 53.5
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

Average for 12 months – 55.6
High – 61.4
Low – 50.6

New Orders

ISM’s New Orders Index registered 56.7 percent in November, which is an increase of 4.3 percentage points when compared to the October reading of 52.4 percent, and represents a continuation of growth for the second consecutive month. 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 five industries reporting growth in new orders in November are: Wood Products; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Chemical Products. The six industries reporting decreases in new orders in November — listed in order — are: Nonmetallic Mineral Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Paper Products; Machinery; and Plastics & Rubber Products. Seven industries reported no change in new orders in November compared to October.

New Orders           %Better         %Same         %Worse         Net         Index
 
Nov 2011 23 55 22 +1 56.7
Oct 2011 22 53 25 -3 52.4
Sep 2011 23 53 24 -1 49.6
Aug 2011 22 53 25 -3 49.6

Production

ISM’s Production Index registered 56.6 percent in November, which is an increase of 6.5 percentage points when compared to the October reading of 50.1 percent. This indicates growth for the third consecutive month after just one month of contraction. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

The seven industries reporting growth in production during the month of November — listed in order — are: Wood Products; Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Computer & Electronic Products; Paper Products; and Electrical Equipment, Appliances & Components. The six industries reporting a decrease in production in November — listed in order — are: Miscellaneous Manufacturing; Nonmetallic Mineral Products; Machinery; Transportation Equipment; Chemical Products; and Plastics & Rubber Products.

Production           %Better         %Same         %Worse         Net         Index
 
Nov 2011 24 55 21 +3 56.6
Oct 2011 21 59 20 +1 50.1
Sep 2011 23 56 21 +2 51.2
Aug 2011 19 62 19 0 48.6

Employment

ISM’s Employment Index registered 51.8 percent in November, which is 1.7 percentage points lower than the 53.5 percent reported in October. This is the 26th 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 November in the following order: Textile Mills; Wood Products; Paper Products; Primary Metals; Food, Beverage & Tobacco Products; Machinery; Fabricated Metal Products; and Computer & Electronic Products. The eight industries reporting a decrease in employment in November — listed in order — are: Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Plastics & Rubber Products; Petroleum & Coal Products; Chemical Products; Transportation Equipment; and Printing & Related Support Activities.

Employment           %Higher         %Same         %Lower         Net         Index
 
Nov 2011 22 57 21 +1 51.8
Oct 2011 22 63 15 +7 53.5
Sep 2011 22 62 16 +6 53.8
Aug 2011 22 63 15 +7 51.8

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was faster in November as the Supplier Deliveries Index registered 49.9 percent, which is 1.4 percentage points lower than the 51.3 percent registered in October. This is the first month supplier deliveries have been faster than the previous month since May 2009, when the Supplier Deliveries Index also registered 49.9 percent. A reading above 50 percent indicates slower deliveries.

The six industries reporting slower supplier deliveries in November — listed in order — are: Petroleum & Coal Products; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Transportation Equipment; and Nonmetallic Mineral Products. The six industries reporting faster deliveries in November — listed in order — are: Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Machinery; Paper Products; and Chemical Products. Six industries reported no change in supplier deliveries in November compared to October.

Supplier Deliveries           %Slower         %Same         %Faster         Net         Index
 
Nov 2011 9 79 12 -3 49.9
Oct 2011 10 81 9 +1 51.3
Sep 2011 12 81 7 +5 51.4
Aug 2011 12 81 7 +5 50.6

Inventories

The Inventories Index registered 48.3 percent in November, 1.6 percentage points higher than the 46.7 percent reported in October. 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 November — listed in order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Primary Metals; Miscellaneous Manufacturing; Machinery; and Paper Products. The eight industries reporting decreases in inventories in November — listed in order — are: Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Printing & Related Support Activities; Fabricated Metal Products; Chemical Products; Computer & Electronic Products; and Transportation Equipment.

Inventories           %Higher         %Same         %Lower         Net         Index
 
Nov 2011 16 61 23 -7 48.3
Oct 2011 17 59 24 -7 46.7
Sep 2011 23 58 19 +4 52.0
Aug 2011 23 63 14 +9 52.3

Customers’ Inventories(c)

The ISM Customers’ Inventories Index registered 50 percent in November, 6.5 percentage points higher than in October when the index registered 43.5 percent. This month’s reading, at 50 percent, indicates that respondents believe their customers’ inventories are unchanged from last month, and also represents the first month that the Customers’ Inventories Index has not registered below 50 percent since March 2009, when customers’ inventories was at 54 percent.

The six manufacturing industries reporting customers’ inventories as being too high during November — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Chemical Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Machinery. The eight industries reporting customers’ inventories as too low during November — listed in order — are: Miscellaneous Manufacturing; Nonmetallic Mineral Products; Petroleum & Coal Products; Printing & Related Support Activities; Transportation Equipment; Computer & Electronic Products; Paper Products; and Electrical Equipment, Appliances & Components.

Customers’ Inventories          

%
Reporting

   

%Too
High

   

%About
Right

   

%Too
Low

    Net     Index
 
Nov 2011 65 19 62 19 0 50.0
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

Prices(c)

The ISM Prices Index registered 45 percent in November, 4 percentage points higher than the 41 percent reported in October. This is the second consecutive month of contraction in the Prices Index. In November, 19 percent of respondents reported paying higher prices, 29 percent reported paying lower prices and 52 percent of supply executives reported paying the same prices as in October. 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, five industries report paying increased prices during the month of November: Primary Metals; Furniture & Related Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Transportation Equipment. The 10 industries reporting paying lower prices on average during the month of November — listed in order — are: Textile Mills; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Fabricated Metal Products; Petroleum & Coal Products; Machinery; Paper Products; Chemical Products; Plastics & Rubber Products; and Printing & Related Support Activities.

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Prices           %Higher     %Same     %Lower     Net     Index
 
Nov 2011 19 52 29 -10 45.0
Oct 2011 14