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April Manufacturing ISM Report On Business®; PMI at 54.8%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

Dépèche transmise le 1 mai 2012 par Business Wire

April Manufacturing ISM Report On Business®; PMI at 54.8%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

April Manufacturing ISM Report On Business®; PMI at 54.8%; New Orders, Production and Employment Growing; Supplier Deliveries Faster; Inventories Contracting

TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in April for the 33rd consecutive month, and the overall economy grew for the 35th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

“The economy was off to a good start through the first quarter, but the European issues keep coming up as well as the recent disappointing jobs report. It appears that some of the early gains may be temporary.”

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 54.8 percent, an increase of 1.4 percentage points from March’s reading of 53.4 percent, indicating expansion in the manufacturing sector for the 33rd consecutive month. Sixteen of the 18 industries reflected overall growth in April, and the New Orders, Production and Employment Indexes all increased, indicating growth at faster rates than in March. The Prices Index for raw materials remained at 61 percent in April, the same rate as reported in March. Comments from the panel generally indicate stable to strong demand, with some concerns cited over increasing oil prices and European stability.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 16 are reporting growth in April, in the following order: Furniture & Related Products; Printing & Related Support Activities; Machinery; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Primary Metals; Paper Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Computer & Electronic Products; and Petroleum & Coal Products. The only industry reporting contraction in April is Wood Products.

WHAT RESPONDENTS ARE SAYING …

  • “We expect our production levels to remain at the current level or increase over the next quarter.” (Chemical Products)
  • “In general, demand remains strong for products, and we [are experiencing] more supply disruptions now than four to five months ago.” (Machinery)
  • “The economy was off to a good start through the first quarter, but the European issues keep coming up as well as the recent disappointing jobs report. It appears that some of the early gains may be temporary.” (Fabricated Metal Products)
  • “Warm weather in Midwest appears to have helped soft drink sales.” (Food, Beverage & Tobacco Products)
  • “Positive increase in volume of sales and orders, and slight uptick in inventories, indicate the overall outlook remains robust through summer at least.” (Miscellaneous Manufacturing)
  • “Sales are slowing.” (Computer & Electronic Products)
  • “Business conditions on a national scale have a very positive outlook for the commercial metals we provide. At this point, we have outperformed each quarter’s goal and anticipate a strong finish.” (Primary Metals)
  • “Strong demand [compared to] previous year.” (Plastics & Rubber Products)
  • “Business indicators suggest a stronger stability in overall environment. Production and orders are stable.” (Transportation Equipment)
  • “Business conditions continue to improve.” (Furniture & Related Products)
MANUFACTURING AT A GLANCE

APRIL 2012

Index    

Series
Index
Apr

   

Series
Index
Mar

   

Percentage
Point
Change

    Direction    

Rate of
Change

   

Trend(a)
(Months)

 
PMI 54.8 53.4 +1.4 Growing Faster 33
New Orders 58.2 54.5 +3.7 Growing Faster 36
Production 61.0 58.3 +2.7 Growing Faster 35
Employment 57.3 56.1 +1.2 Growing Faster 31
Supplier Deliveries 49.2 48.0 +1.2 Faster Slower 3
Inventories 48.5 50.0 -1.5 Contracting From Unchanged 1
Customers’ Inventories 45.5 44.5 +1.0 Too Low Faster 5
Prices 61.0 61.0 0.0 Increasing Same 4
Backlog of Orders 49.5 52.5 -3.0 Contracting From Growing 1
Exports 59.0 54.0 +5.0 Growing Faster 6
Imports 53.5 53.5 0.0 Growing Same 5
OVERALL ECONOMY

 

Manufacturing Sector

Growing Faster 35
Growing Faster 33

(a) Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Alloys; Aluminum Products (3); Fabricated Metal Parts; Ferro Alloys; #2 Fuel Oil; Gasoline (2); HDPE (2); Lumber (2); Machined Metal Parts; Motors; Oil (2); Oil Related Products; Plastic Components (2); Plastic Resins (3); Polypropylene (3); Propylene; Rubber Products (2); Steel — Hot Rolled; Steel Based Products; Soybean Oil; Titanium Dioxide; and Transportation Costs.

Commodities Down in Price

Natural Gas (9); and Steel (2).

Commodities in Short Supply

No commodities are reported in short supply.

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

APRIL 2012 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued its growth in April as the PMI registered 54.8 percent, an increase of 1.4 percentage points when compared to March’s reading of 53.4 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 42.6 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 35th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 33rd consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through April (53.7 percent) corresponds to a 3.8 percent increase in real gross domestic product (GDP). In addition, if the PMI for April (54.8 percent) is annualized, it corresponds to a 4.1 percent increase in real GDP annually.”

THE LAST 12 MONTHS

          Month           PMI                     Month           PMI
 
Apr 2012 54.8 Oct 2011 51.8
Mar 2012 53.4 Sep 2011 52.5
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

Average for 12 months – 53.2
High – 55.8
Low – 51.4

New Orders

ISM’s New Orders Index registered 58.2 percent in April, which is an increase of 3.7 percentage points when compared to the March reading of 54.5 percent. This represents a continuation of growth for the 36th consecutive month, and at a faster rate than in March. 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 15 industries reporting growth in new orders in April — listed in order — are: Furniture & Related Products; Printing & Related Support Activities; Paper Products; Machinery; Primary Metals; Transportation Equipment; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Chemical Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; and Petroleum & Coal Products. No industries reported a decrease in new orders during April.

New Orders           %Better         %Same         %Worse         Net         Index
 
Apr 2012 41 48 11 +30 58.2
Mar 2012 34 53 13 +21 54.5
Feb 2012 37 45 18 +19 54.9
Jan 2012 35 45 20 +15 57.6

Production

ISM’s Production Index registered 61 percent in April, which is an increase of 2.7 percentage points when compared to the 58.3 percent reported in March. This indicates growth for the 35th 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 15 industries reporting growth in production during the month of April — listed in order — are: Nonmetallic Mineral Products; Furniture & Related Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Paper Products; Transportation Equipment; Machinery; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; Primary Metals; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Fabricated Metal Products; and Computer & Electronic Products. No industries reported a decrease in production during April.

Production           %Better         %Same         %Worse         Net         Index
 
Apr 2012 44 47 9 +35 61.0
Mar 2012 35 51 14 +21 58.3
Feb 2012 35 50 15 +20 55.3
Jan 2012 27 53 20 +7 55.7

Employment

ISM’s Employment Index registered 57.3 percent in April, which is 1.2 percentage points higher than the 56.1 percent reported in March. This is the 31st 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, 13 reported growth in employment in April in the following order: Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Machinery; Furniture & Related Products; Miscellaneous Manufacturing; Transportation Equipment; Apparel, Leather & Allied Products; Paper Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Chemical Products. The three industries reporting a decrease in employment in April are: Computer & Electronic Products; Petroleum & Coal Products; and Printing & Related Support Activities.

Employment           %Higher         %Same         %Lower         Net         Index
 
Apr 2012 34 54 12 +22 57.3
Mar 2012 25 63 12 +13 56.1
Feb 2012 26 58 16 +10 53.2
Jan 2012 23 59 18 +5 54.3

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was faster in April as the Supplier Deliveries Index registered 49.2 percent, which is 1.2 percentage points higher than the 48 percent reported in March. This is the third consecutive 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 April are: Machinery; Electrical Equipment, Appliances & Components; Furniture & Related Products; and Transportation Equipment. The five industries reporting faster deliveries in April are: Apparel, Leather & Allied Products; Chemical Products; Food, Beverage & Tobacco Products; Paper Products; and Fabricated Metal Products. Nine industries reported no change in supplier deliveries in April compared to March.

Supplier Deliveries           %Slower         %Same         %Faster         Net         Index
 
Apr 2012 9 82 9 0 49.2
Mar 2012 9 83 8 +1 48.0
Feb 2012 7 82 11 -4 49.0
Jan 2012 9 84 7 +2 53.6

Inventories(b)

The Inventories Index registered 48.5 percent in April, which is 1.5 percentage points lower than the 50 percent reported in March. This month’s reading, at 48.5 percent, indicates that respondents are reporting inventories are contracting, which has been the case in six out of the last seven months. 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 April — listed in order — are: Printing & Related Support Activities; Miscellaneous Manufacturing; Primary Metals; Machinery; Food, Beverage & Tobacco Products; Computer & Electronic Products; Paper Products; and Petroleum & Coal Products. The six industries reporting decreases in inventories in April — listed in order — are: Nonmetallic Mineral Products; Transportation Equipment; Apparel, Leather & Allied Products; Furniture & Related Products; Chemical Products; and Fabricated Metal Products.

Inventories           %Higher         %Same         %Lower         Net         Index
 
Apr 2012 17 63 20 -3 48.5
Mar 2012 20 60 20 0 50.0
Feb 2012 20 59 21 -1 49.5
Jan 2012 21 57 22 -1 49.5

Customers’ Inventories(b)

The ISM Customers’ Inventories Index registered 45.5 percent in April, which is 1 percentage point higher than in March when the index registered 44.5 percent. Customers’ inventories have registered at or below 50 percent for 37 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.

The four manufacturing industries reporting customers’ inventories as being too high during April are: Electrical Equipment, Appliances & Components; Fabricated Metal Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The eight industries reporting customers’ inventories as too low during April — listed in order — are: Paper Products; Computer & Electronic Products; Plastics & Rubber Products; Petroleum & Coal Products; Machinery; Transportation Equipment; Furniture & Related Products; and Chemical Products.

Customers’ Inventories          

%
Reporting

   

%Too
High

   

%About
Right

   

%Too
Low

    Net     Index
 
Apr 2012 71 11 69 20 -9 45.5
Mar 2012 72 14 61 25 -11 44.5
Feb 2012 65 15 62 23 -8 46.0
Jan 2012 64 17 61 22 -5 47.5

Prices(b)

The ISM Prices Index registered 61 percent in April, the same rate as reported in March. This is the fourth consecutive month the index has reflected an increase in the price of raw materials since September 2011, when the index registered 56 percent. In April, 33 percent of respondents reported paying higher prices, 11 percent reported paying lower prices and 56 percent of supply executives reported paying the same prices as in March. 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 April in the following order: Furniture & Related Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Paper Products; Chemical Products; Apparel, Leather & Allied Products; Machinery; Miscellaneous Manufacturing; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Electrical Equipment, Appliances & Components. The only industry reporting paying lower prices on average during the month of April is Transportation Equipment.

Prices           %Higher         %Same         %Lower         Net         Index
 
Apr 2012 33 56 11 +22 61.0
Mar 2012 36

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