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March Manufacturing ISM Report On Business®; PMI at 61.2%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Contracting
Dépèche transmise le 1 avril 2011 par Business Wire
March Manufacturing ISM Report On Business®; PMI at 61.2%; New Orders, Production and Employment Growing; Supplier Deliveries Slower; Inventories Contracting
TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in March for the 20th consecutive month, and the overall economy grew for the 22nd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
“Customer orders have picked up nicely. [This is] likely in anticipation of increasing prices due to commodity costs that will likely happen over next month.”
The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The recent trend of rapid growth in the manufacturing sector continued in March, as the PMI registered above 60 percent for the third consecutive month. The component indexes of the PMI remain at very positive levels and signal strong sector performance in the first quarter. While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices. Many manufacturers indicate the prices they have to pay for inputs are rising, and there is concern about the impact of higher prices on their margins.”
PERFORMANCE BY INDUSTRY
Of the 18 manufacturing industries, 15 are reporting growth in March, in the following order: Apparel, Leather & Allied Products; Transportation Equipment; Fabricated Metal Products; Machinery; Textile Mills; Computer & Electronic Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Paper Products; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Miscellaneous Manufacturing; and Printing & Related Support Activities. The two industries reporting contraction in March are: Wood Products and Primary Metals.
WHAT RESPONDENTS ARE SAYING …
- “Customer orders have picked up nicely. [This is] likely in anticipation of increasing prices due to commodity costs that will likely happen over next month.” (Food, Beverage & Tobacco Products)
- “New orders continue at a robust pace this month.” (Miscellaneous Manufacturing)
- “What will be the impact to the U.S. supply chain after the devastation caused by the Japan earthquake?” (Chemical Products)
- “The building side of our business is mired with little hope of a rebound anytime soon.” (Fabricated Metal Products)
- “Steel and certain steel products causing concern over price increases and availability.” (Machinery)
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MANUFACTURING AT A GLANCE |
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| Index |
Series |
Series |
Percentage |
Direction |
Rate |
Trend(a) |
||||||
| PMI | 61.2 | 61.4 | -0.2 | Growing | Slower | 20 | ||||||
| New Orders | 63.3 | 68.0 | -4.7 | Growing | Slower | 21 | ||||||
| Production | 69.0 | 66.3 | +2.7 | Growing | Faster | 22 | ||||||
| Employment | 63.0 | 64.5 | -1.5 | Growing | Slower | 18 | ||||||
| Supplier Deliveries | 63.1 | 59.4 | +3.7 | Slowing | Faster | 22 | ||||||
| Inventories | 47.4 | 48.8 | -1.4 | Contracting | Faster | 2 | ||||||
| Customers’ Inventories | 39.5 | 40.0 | -0.5 | Too Low | Faster | 24 | ||||||
| Prices | 85.0 | 82.0 | +3.0 | Increasing | Faster | 21 | ||||||
| Backlog of Orders | 52.5 | 59.0 | -6.5 | Growing | Slower | 3 | ||||||
| Exports | 56.0 | 62.5 | -6.5 | Growing | Slower | 21 | ||||||
| Imports | 56.5 | 55.0 | +1.5 | Growing | Faster | 19 | ||||||
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OVERALL ECONOMY
Manufacturing Sector |
Growing | Slower | 22 | |||||||||
| Growing | Slower | 20 | ||||||||||
(a) Number of months moving in current direction
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum (7); Aluminum Products (3); Brass (4); Caustic Soda; Chemicals; Cocoa/Cocoa Powder (2); Copper (8); Copper Based Products (5); Corn (7); Corn Syrup; Diesel (4); Electronic Components; Fuel Oils (3); Fuel Surcharges; High Density Polyethylene; Nickel (2); PET; Plastics (3); Plastic Products (3); Plastic Resins (5); Polyethylene (2); Polyethylene Resin (3); Polypropylene (3); Resins; Resin Based Products; Rubber; Rubber Products (2); Silver; Stainless Steel (5); Steel (7); Steel — Hot Rolled (2); Steel Products (4); Steel Surcharges (3); Sugar (3); and Transportation Rates.
Commodities Down in Price
Natural Gas is the only commodity reported down in price.
Commodities in Short Supply
Cocoa Powder (2); Electric Components (3); and Titanium Dioxide.
Note: The number of consecutive months the commodity is listed is indicated after each item.
MARCH 2011 MANUFACTURING INDEX SUMMARIES
PMI
Manufacturing continued its rapid growth in March as the PMI registered 61.2 percent, a decrease of 0.2 percentage point when compared to February’s reading of 61.4 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 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 22nd consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 20th consecutive month. Ore stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through March (61.1 percent) corresponds to a 6.5 percent increase in real gross domestic product (GDP). In addition, if the PMI for March (61.2 percent) is annualized, it corresponds to a 6.5 percent increase in real GDP annually.”
THE LAST 12 MONTHS
| Month | PMI | Month | PMI | |||||||||||||||||||||||||||||||||||||||
| Mar 2011 | 61.2 | Sep 2010 | 55.3 | |||||||||||||||||||||||||||||||||||||||
| Feb 2011 | 61.4 | Aug 2010 | 55.2 | |||||||||||||||||||||||||||||||||||||||
| Jan 2011 | 60.8 | Jul 2010 | 55.1 | |||||||||||||||||||||||||||||||||||||||
| Dec 2010 | 58.5 | Jun 2010 | 55.3 | |||||||||||||||||||||||||||||||||||||||
| Nov 2010 | 58.2 | May 2010 | 57.8 | |||||||||||||||||||||||||||||||||||||||
| Oct 2010 | 56.9 | Apr 2010 | 59.6 | |||||||||||||||||||||||||||||||||||||||
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Average for 12 months – 57.9 |
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New Orders
ISM’s New Orders Index registered 63.3 percent in March, which is a decrease of 4.7 percentage points when compared to the 68 percent reported in February. This is the 21st 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 14 industries reporting growth in new orders in March — listed in order — are: Apparel, Leather & Allied Products; Furniture & Related Products; Transportation Equipment; Fabricated Metal Products; Textile Mills; Paper Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Petroleum & Coal Products; Computer & Electronic Products; Chemical Products; Machinery; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. The two industries reporting decreases in new orders in March are: Wood Products and Primary Metals.
| New Orders | %Better | %Same | %Worse | Net | Index | ||||||||||||||||||||||
| Mar 2011 | 43 | 47 | 10 | +33 | 63.3 | ||||||||||||||||||||||
| Feb 2011 | 43 | 46 | 11 | +32 | 68.0 | ||||||||||||||||||||||
| Jan 2011 | 46 | 36 | 18 | +28 | 67.8 | ||||||||||||||||||||||
| Dec 2010 | 31 | 47 | 22 | +9 | 62.0 |
Production
ISM’s Production Index registered 69 percent in March, which is an increase of 2.7 percentage points from the February reading of 66.3 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 22nd consecutive month the Production Index has registered above 50 percent.
The 14 industries reporting growth in production during the month of March — listed in order — are: Apparel, Leather & Allied Products; Furniture & Related Products; Textile Mills; Plastics & Rubber Products; Transportation Equipment; Fabricated Metal Products; Paper Products; Food, Beverage & Tobacco Products; Machinery; Petroleum & Coal Products; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; and Chemical Products. The two industries reporting a decrease in production in March are: Printing & Related Support Activities; and Primary Metals.
| Production | %Better | %Same | %Worse | Net | Index | |||||||||||||||||||||
| Mar 2011 | 41 | 52 | 7 | +34 | 69.0 | |||||||||||||||||||||
| Feb 2011 | 43 | 47 | 10 | +33 | 66.3 | |||||||||||||||||||||
| Jan 2011 | 40 | 44 | 16 | +24 | 63.5 | |||||||||||||||||||||
| Dec 2010 | 30 | 52 | 18 | +12 | 63.0 |
Employment
ISM’s Employment Index registered 63 percent in March, which is 1.5 percentage points lower than the 64.5 percent reported in February. This is the 18th 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, 12 reported growth in employment in March in the following order: Apparel, Leather & Allied Products; Machinery; Transportation Equipment; Textile Mills; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Paper Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Printing & Related Support Activities; and Fabricated Metal Products. The two industries reporting a decrease in employment during March are: Wood Products; and Petroleum & Coal Products.
| Employment | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
| Mar 2011 | 33 | 59 | 8 | +25 | 63.0 | |||||||||||||||||||||
| Feb 2011 | 35 | 56 | 9 | +26 | 64.5 | |||||||||||||||||||||
| Jan 2011 | 24 | 69 | 7 | +17 | 61.7 | |||||||||||||||||||||
| Dec 2010 | 22 | 66 | 12 | +10 | 58.9 |
Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was slower in March as the Supplier Deliveries Index registered 63.1 percent, which is 3.7 percentage points higher than the 59.4 percent registered in February. This is the 22nd consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.
The 11 industries reporting slower supplier deliveries in March — listed in order — are: Machinery; Apparel, Leather & Allied Products; Fabricated Metal Products; Transportation Equipment; Petroleum & Coal Products; Primary Metals; Plastics & Rubber Products; Computer & Electronic Products; Chemical Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. None of the manufacturing industries reported faster deliveries in March.
| Supplier Deliveries | %Slower | %Same | %Faster | Net | Index | |||||||||||||||||||||
| Mar 2011 | 26 | 73 | 1 | +25 | 63.1 | |||||||||||||||||||||
| Feb 2011 | 24 | 69 | 7 | +17 | 59.4 | |||||||||||||||||||||
| Jan 2011 | 18 | 77 | 5 | +13 | 58.6 | |||||||||||||||||||||
| Dec 2010 | 15 | 78 | 7 | +8 | 56.7 |
Inventories
Manufacturers’ inventories declined in March for the second consecutive month. The Inventories Index registered 47.4 percent, 1.4 percentage points less than the 48.8 percent recorded for February. 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 seven industries reporting higher inventories in March — listed in order — are: Apparel, Leather & Allied Products; Fabricated Metal Products; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Chemical Products; and Machinery. The eight industries reporting decreases in inventories in March — listed in order — are: Plastics & Rubber Products; Primary Metals; Petroleum & Coal Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Paper Products; and Transportation Equipment.
| Inventories | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
| Mar 2011 | 19 | 60 | 21 | -2 | 47.4 | |||||||||||||||||||||
| Feb 2011 | 19 | 63 | 18 | +1 | 48.8 | |||||||||||||||||||||
| Jan 2011 | 25 | 54 | 21 | +4 | 52.4 | |||||||||||||||||||||
| Dec 2010 | 24 | 52 | 24 | 0 | 51.8 |
Customers’ Inventories(b)
The ISM Customers’ Inventories Index registered 39.5 percent in March, 0.5 percentage point lower than in February when the index registered 40 percent. This is the 24th 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 only manufacturing industry reporting customers’ inventories as being too high during March is Primary Metals. The 11 industries reporting customers’ inventories as too low during March — listed in order — are: Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Apparel, Leather & Allied Products; Machinery; Transportation Equipment; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Fabricated Metal Products.
| Customers’ Inventories |
% |
%Too |
%About |
%Too Low | Net | Index | |||||||||||||||
| Mar 2011 | 62 | 11 | 57 | 32 | -21 | 39.5 | |||||||||||||||
| Feb 2011 | 66 | 7 | 66 | 27 | -20 | 40.0 | |||||||||||||||
| Jan 2011 | 63 | 11 | 69 | 20 | -9 | 45.5 | |||||||||||||||
| Dec 2010 | 67 | 8 | 64 | 28 | -20 | 40.0 |
Prices(b)
The ISM Prices Index registered 85 percent in March, 3 percentage points higher than the 82 percent reported in February and the highest reading since July 2008 when the index registered 88.5 percent. This is the 21st consecutive month the Prices Index has registered above 50 percent. While 72 percent of respondents reported paying higher prices and 2 percent reported paying lower prices, 26 percent of supply executives reported paying the same prices as in February. 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.
All 18 manufacturing industries report paying increased prices during the month of March in the following order: Textile Mills; Apparel, Leather & Allied Products; Wood Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Fabricated Metal Products; Machinery; Transportation Equipment; Primary Metals; Chemical Products; Paper Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Printing & Related Support Activities; Computer & Electronic Products; Petroleum & Coal Products; and Plastics & Rubber Products.
