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February Manufacturing ISM Report On Business®; PMI at 52.4%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

Dépèche transmise le 1 mars 2012 par Business Wire

February Manufacturing ISM Report On Business®; PMI at 52.4%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

February Manufacturing ISM Report On Business®; PMI at 52.4%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in February for the 31st consecutive month, and the overall economy grew for the 33rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

“Business is holding steady. Concern over commodity prices ongoing.”

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 52.4 percent, a decrease of 1.7 percentage points from January’s reading of 54.1 percent, indicating expansion in the manufacturing sector for the 31st consecutive month. The New Orders Index registered 54.9 percent, a decrease of 2.7 percentage points from January’s reading of 57.6 percent, reflecting the 34th consecutive month of growth in new orders. Prices of raw materials increased for the second consecutive month, with the Prices Index registering 61.5 percent. As was the case in January, new orders, production and employment all grew in February — although at somewhat slower rates than in January. Comments from the panel continue to reflect a generally positive outlook for the next few months.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 11 are reporting growth in February, in the following order: Apparel, Leather & Allied Products; Machinery; Primary Metals; Transportation Equipment; Petroleum & Coal Products; Fabricated Metal Products; Paper Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; and Chemical Products. The four industries reporting contraction in February are: Furniture & Related Products; Nonmetallic Mineral Products; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components.

WHAT RESPONDENTS ARE SAYING …

  • “Business is holding steady. Concern over commodity prices ongoing.” (Chemical Products)
  • “Still somewhat cautious about recovery. Expecting a good year, but not seeing orders yet.” (Machinery)
  • “Demand remains consistent to strong on all levels.” (Paper Products)
  • “Demand from auto makers is getting stronger.” (Fabricated Metal Products)
  • “Manufacturing is busy. Spending money on new equipment to accommodate customer demands. Material prices are staying in check.” (Food, Beverage & Tobacco Products)
  • “There seems to be a much more positive outlook for the economy. Customers are ordering material for stock rather than just working hand-to-mouth.” (Fabricated Metal Products)
  • “Global GDP softening and beginning to impact the demand chain.” (Computer & Electronic Products)
  • “Production is busy — several new large projects.” (Primary Metals)
  • “Customers [are] lowering inventory levels, anticipating price decrease due to third-party published reports on materials.” (Plastics & Metal Products)
  • “We are optimistic about the U.S. market this year, a little hesitant about what may happen in Europe and unsure about China.” (Transportation Equipment)
  • “Shipments are increasing over last year. Waiting to see if the trend continues.” (Wood Products)
MANUFACTURING AT A GLANCE

FEBRUARY 2012

Index    

Series
Index
Feb

   

Series
Index
Jan

   

Percentage
Point
Change

    Direction    

Rate of
Change

   

Trend(a)
(Months)

 
PMI 52.4 54.1 -1.7 Growing Slower 31
New Orders 54.9 57.6 -2.7 Growing Slower 34
Production 55.3 55.7 -0.4 Growing Slower 33
Employment 53.2 54.3 -1.1 Growing Slower 29
Supplier Deliveries 49.0 53.6 -4.6 Faster From Slowing 1
Inventories 49.5 49.5 0.0 Contracting Same

5

Customers’ Inventories 46.0 47.5 -1.5 Too Low Faster

3

Prices 61.5 55.5 +6.0 Increasing Faster 2
Backlog of Orders 52.0 52.5 -0.5 Growing Slower 2
Exports 59.5 55.0 +4.5 Growing Faster 4
Imports 54.0 52.5 +1.5 Growing Faster 3
OVERALL ECONOMY

 

Manufacturing Sector

Growing Slower 33
Growing Slower 31

(a) Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum Products; Caustic Soda (2); Copper Products; Ethylene; Forgings; #2 Fuel Oil; HDPE Products; Plastic Resins; Polypropylene; Propylene; Stainless Steel (2); Steel (3); Steel Bar; Steel — Cold Rolled (2); Steel — Hot Rolled; Scrap Metal; and Titanium Dioxide (2).

Commodities Down in Price

Natural Gas (7) is the only commodity reported down in price.

Commodities in Short Supply

Hard Drives (3) is the only commodity reported in short supply.

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

FEBRUARY 2012 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued its growth in February as the PMI registered 52.4 percent, a decrease of 1.7 percentage points when compared to January’s reading of 54.1 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 42.6 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 33rd consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 31st consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January and February (53.3 percent) corresponds to a 3.6 percent increase in real gross domestic product (GDP). In addition, if the PMI for February (52.4 percent) is annualized, it corresponds to a 3.3 percent increase in real GDP annually.”

THE LAST 12 MONTHS

          Month           PMI                     Month           PMI
 
Feb 2012 52.4 Aug 2011 52.5
Jan 2012 54.1 Jul 2011 51.4
Dec 2011 53.1 Jun 2011 55.8
Nov 2011 52.2 May 2011 54.2
Oct 2011 51.8 Apr 2011 59.7
Sep 2011 52.5 Mar 2011 59.7

Average for 12 months – 54.1
High – 59.7
Low – 51.4

New Orders

ISM’s New Orders Index registered 54.9 percent in February, which is a decrease of 2.7 percentage points when compared to the January reading of 57.6 percent. This represents a continuation of growth for the 34th consecutive month. A New Orders Index above 52.3 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 February — listed in order — are: Primary Metals; Apparel, Leather & Allied Products; Petroleum & Coal Products; Machinery; Fabricated Metal Products; Transportation Equipment; Food, Beverage & Tobacco Products; Chemical Products; Paper Products; and Computer & Electronic Products. The four industries reporting decreases in new orders in February are: Nonmetallic Mineral Products; Furniture & Related Products; Printing & Related Support Activities; and Plastics & Rubber Products.

New Orders           %Better         %Same         %Worse         Net         Index
 
Feb 2012 37 45 18 +19 54.9
Jan 2012 35 45 20 +15 57.6
Dec 2011 29 44 27 +2 54.8
Nov 2011 23 55 22 +1 55.0

Production

ISM’s Production Index registered 55.3 percent in February, which is a decrease of 0.4 percentage point when compared to the 55.7 percent reported in January. This indicates growth for the 33rd consecutive month. An index above 51.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

The 10 industries reporting growth in production during the month of February — listed in order — are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Transportation Equipment; Machinery; Paper Products; Primary Metals; Fabricated Metal Products; Chemical Products; Miscellaneous Manufacturing; and Computer & Electronic Products. The three industries reporting a decrease in production in February are: Furniture & Related Products; Nonmetallic Mineral Products; and Food, Beverage & Tobacco Products.

Production           %Better         %Same         %Worse         Net         Index
 
Feb 2012 35 50 15 +20 55.3
Jan 2012 27 53 20 +7 55.7
Dec 2011 27 54 19 +8 58.9
Nov 2011 24 55 21 +3 55.7

Employment

ISM’s Employment Index registered 53.2 percent in February, which is 1.1 percentage points lower than the 54.3 percent reported in January. This is the 29th consecutive month of growth in the Employment Index. An Employment Index above 50.5 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, nine reported growth in employment in February in the following order: Apparel, Leather & Allied Products; Paper Products; Primary Metals; Machinery; Transportation Equipment; Petroleum & Coal Products; Miscellaneous Manufacturing; Fabricated Metal Products; and Computer & Electronic Products. The five industries reporting a decrease in employment in February are: Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Chemical Products; Food, Beverage & Tobacco Products; and Nonmetallic Mineral Products.

Employment           %Higher         %Same         %Lower         Net         Index
 
Feb 2012 26 58 16 +10 53.2
Jan 2012 23 59 18 +5 54.3
Dec 2011 23 58 19 +4 54.8
Nov 2011 22 57 21 +1 52.4

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was faster in February as the Supplier Deliveries Index registered 49 percent, which is 4.6 percentage points lower than the 53.6 percent reported in January. This is the first month supplier deliveries have been faster than the previous month, following 31 consecutive months in which supplier deliveries slowed. A reading above 50 percent indicates slower deliveries.

The four industries reporting slower supplier deliveries in February are: Electrical Equipment, Appliances & Components; Transportation Equipment; Fabricated Metal Products; and Machinery. The six industries reporting faster deliveries in February — listed in order — are: Primary Metals; Plastics & Rubber Products; Petroleum & Coal Products; Chemical Products; Paper Products; and Miscellaneous Manufacturing. Eight industries reported no change in supplier deliveries in February compared to January.

Supplier Deliveries           %Slower         %Same         %Faster         Net         Index
 
Feb 2012 7 82 11 -4 49.0
Jan 2012 9 84 7 +2 53.6
Dec 2011 8 79 13 -5 51.5
Nov 2011 9 79 12 -3 51.3

Inventories(b)

The Inventories Index registered 49.5 percent in February, which is the same percentage reported for January. An Inventories Index greater than 42.8 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 eight industries reporting higher inventories in February — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Primary Metals; Machinery; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Transportation Equipment; and Computer & Electronic Products. The six industries reporting decreases in inventories in February — listed in order — are: Paper Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; Fabricated Metal Products; and Miscellaneous Manufacturing.

Inventories           %Higher         %Same         %Lower         Net         Index
 
Feb 2012 20 59 21 -1 49.5
Jan 2012 21 57 22 -1 49.5
Dec 2011 21 49 30 -9 45.5
Nov 2011 16 61 23 -7 46.5

Customers’ Inventories(b)

The ISM Customers’ Inventories Index registered 46 percent in February, which is 1.5 percentage points lower than in January when the index registered 47.5 percent. Customers’ inventories have registered at or below 50 percent for 35 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.

The five manufacturing industries reporting customers’ inventories as being too high during February are: Apparel, Leather & Allied Products; Primary Metals; Chemical Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The seven industries reporting customers’ inventories as too low during February — listed in order — are: Nonmetallic Mineral Products; Plastics & Rubber Products; Transportation Equipment; Paper Products; Computer & Electronic Products; Fabricated Metal Products; and Electrical Equipment, Appliances & Components.

Customers’ Inventories          

%
Reporting

   

%Too
High

   

%About
Right

   

%Too
Low

    Net     Index
 
Feb 2012 65 15 62 23 -8 46.0
Jan 2012 64 17 61 22 -5 47.5
Dec 2011 73 10 65 25 -15 42.5
Nov 2011 65 19 62 19 0 50.0

Prices(b)

The ISM Prices Index registered 61.5 percent in February, 6 percentage points higher than the 55.5 percent reported in January. This is the second consecutive month this index has reflected an increase in the price of raw materials since September 2011, when the index registered 56 percent. In February, 31 percent of respondents reported paying higher prices, 8 percent reported paying lower prices and 61 percent of supply executives reported paying the same prices as in January. 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 industries report paying increased prices during the month of February in the following order: Nonmetallic Mineral Products; Fabricated Metal Products; Plastics & Rubber Products; Primary Metals; Machinery; Chemical Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Furniture & Related Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Computer & Electronic Products; and Food, Beverage & Tobacco Products. The only industry reporting paying lower prices on average during the month of February is Paper Products.

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Prices           %Higher         %Same         %Lower         Net         Index
 
Feb 2012 31 61 8 +23 61.5
Jan 2012 30 51 19 +11