Dépêches

September Manufacturing ISM Report On Business®; PMI at 51.6%; Production, Employment and Inventories Growing; Supplier Deliveries Slower; New Orders Contracting

Dépèche transmise le 3 octobre 2011 par Business Wire

TEMPE, Ariz.--(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in September for the 26th consecutive month, and the overall economy grew for the 28th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business^®.

“Global demand for semiconductors is down and maybe not yet ‘bottomed out.’ Inventory reduction activities are a priority.”

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 51.6 percent, an increase of 1 percentage point from August, indicating expansion in the manufacturing sector for the 26th consecutive month, at a slightly higher rate. The Production Index registered 51.2 percent, indicating a return to growth after contracting in August for the first time since May of 2009. The New Orders Index remained unchanged from August at 49.6 percent, indicating contraction for the third consecutive month. The Backlog of Orders Index decreased 4.5 percentage points to 41.5 percent, contracting for the fourth consecutive month and reaching its lowest level since April 2009, when it registered 40.5 percent. Comments from respondents generally reflect concern over the sluggish economy, political and policy uncertainty in Washington, and forecasts of ongoing high unemployment that will continue to put pressure on demand for manufactured products.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 12 are reporting growth in September, in the following order: Wood Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Plastics & Rubber Products; Printing & Related Support Activities; Chemical Products; and Computer & Electronic Products. The six industries reporting contraction in September — listed in order — are: Primary Metals; Textile Mills; Furniture & Related Products; Fabricated Metal Products; Paper Products; and Electrical Equipment, Appliances & Components.

WHAT RESPONDENTS ARE SAYING …

• “The economy continues to be a drag on our business outlook. We are trying to deal with new and additional FDA regulations which are costing significant dollars. It is hard to recoup any of these additional costs in our pricing levels without losing significant sales volumes.” (Chemical Products)
• “Market is cautious, but still steady.” (Electrical Equipment, Appliances & Components)
• “Global demand for semiconductors is down and maybe not yet ‘bottomed out.’ Inventory reduction activities are a priority.” (Computer & Electronic Products)
• “Still strong automotive demand.” (Fabricated Metal Products)
• “Orders remain consistent and steady — no sign of lower demand.” (Paper Products)
• “Japan supply chain issues are over, but exchange rates and raw material prices are hurting our profit.” (Transportation Equipment)
• “We sense a weakening in demand, but it is not extreme at this point.” (Plastics & Rubber Products)
• “Overall, business is improving with a measurable uptick in orders this month. Part of that is due to pre-holiday season orders.” (Miscellaneous Manufacturing)
• “Business continues to be sluggish.” (Furniture & Related Products)

MANUFACTURING AT A GLANCE SEPTEMBER 2011
Index			Series Index Sep			Series Index Aug			Percentage Point Change			Direction			Rate of Change			Trend(a) (Months)
PMI			51.6			50.6			+1.0			Growing			Faster			26
New Orders			49.6			49.6			0.0			Contracting			Same			3
Production			51.2			48.6			+2.6			Growing			From Contacting			1
Employment			53.8			51.8			+2.0			Growing			Faster			24
Supplier Deliveries			51.4			50.6			+0.8			Slowing			Faster			28
Inventories			52.0			52.3			-0.3			Growing			Slower			2
Customers’ Inventories			49.0			46.5			+2.5			Too Low			Slower			30
Prices			56.0			55.5			+0.5			Increasing			Faster			27
Backlog of Orders			41.5			46.0			-4.5			Contracting			Faster			4
Exports			53.5			50.5			+3.0			Growing			Faster			27
Imports			54.5			55.5			-1.0			Growing			Slower			25
OVERALL ECONOMY   Manufacturing Sector												Growing			Faster			28
		Growing			Faster			26

(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) (2); Copper Based Products (11); Corn (2); Electric/Electronic Components (3); Gasoline; Plastic Resins(b); Stainless Steel (2); Steel(b) (13); and Titanium Dioxide.

Commodities Down in Price

Aluminum; Aluminum Products(b); Copper (2); Corrugated Containers; Natural Gas (2); Plastic Products (2); Plastic Resins(b) (2); Rubber; and Steel(b) (5).

Commodities in Short Supply

Castings; and Electric/Electronic Components (9).

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

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

SEPTEMBER 2011 MANUFACTURING INDEX SUMMARIES

PMI

Manufacturing continued its growth in September as the PMI registered 51.6 percent, an increase of 1 percentage point when compared to August’s reading of 50.6 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 28th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 26th consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through September (56.2 percent) corresponds to a 4.8 percent increase in real gross domestic product (GDP). In addition, if the PMI for September (51.6 percent) is annualized, it corresponds to a 3.2 percent increase in real GDP annually.”

THE LAST 12 MONTHS

					Month											PMI																Month											PMI
					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
					Apr 2011											60.4																Oct 2010											56.9
					Average for 12 months – 56.6 High – 61.4 Low – 50.6

New Orders

ISM’s New Orders Index registered 49.6 percent in September, which represents the same rate as in August. This is the third consecutive month of contraction in the New Orders Index, following 24 months of growth. 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 seven industries reporting growth in new orders in September — listed in order — are: Wood Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Chemical Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Fabricated Metal Products. The nine industries reporting decreases in new orders in September — listed in order — are: Primary Metals; Textile Mills; Apparel, Leather & Allied Products; Paper Products; Transportation Equipment; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; and Plastics & Rubber Products.

New Orders						%Better					%Same					%Worse					Net					Index
Sep 2011						23					53					24					-1					49.6
Aug 2011						22					53					25					-3					49.6
Jul 2011						24					53					23					+1					49.2
Jun 2011						34					43					23					+11					51.6

Production

ISM’s Production Index registered 51.2 percent in September, which is an increase of 2.6 percentage points when compared to the August reading of 48.6 percent, and a return to growth following 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 nine industries reporting growth in production during the month of September — listed in order — are: Wood Products; Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Plastics & Rubber Products; Paper Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. The five industries reporting a decrease in production in September are: Primary Metals; Textile Mills; Machinery; Miscellaneous Manufacturing; and Computer & Electronic Products.

Production						%Better					%Same					%Worse					Net					Index
Sep 2011						23					56					21					+2					51.2
Aug 2011						19					62					19					0					48.6
Jul 2011						22					60					18					+4					52.3
Jun 2011						35					46					19					+16					54.5

Employment

ISM’s Employment Index registered 53.8 percent in September, which is 2 percentage points higher than the 51.8 percent reported in August. 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, nine reported growth in employment in September in the following order: Wood Products; Petroleum & Coal Products; Transportation Equipment; Food, Beverage & Tobacco Products; Chemical Products; Computer & Electronic Products; Paper Products; Miscellaneous Manufacturing; and Machinery. The six industries reporting a decrease in employment in September — listed in order — are: Primary Metals; Plastics & Rubber Products; Textile Mills; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Printing & Related Support Activities.

Employment						%Higher					%Same					%Lower					Net					Index
Sep 2011						22					62					16					+6					53.8
Aug 2011						22					63					15					+7					51.8
Jul 2011						24					63					13					+11					53.5
Jun 2011						34					56					10					+24					59.9

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in September as the Supplier Deliveries Index registered 51.4 percent, which is 0.8 percentage point higher than the 50.6 percent registered in August. This is the 28th consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.

The seven industries reporting slower supplier deliveries in September — listed in order — are: Petroleum & Coal Products; Textile Mills; Electrical Equipment, Appliances & Components; Machinery; Miscellaneous Manufacturing; Computer & Electronic Products; and Transportation Equipment. The four industries reporting faster deliveries in September are: Primary Metals; Paper Products; Fabricated Metal Products; and Plastics & Rubber Products. Seven industries reported no change in supplier deliveries in September compared to August.

Supplier Deliveries						%Slower					%Same					%Faster					Net					Index
Sep 2011						12					81					7					+5					51.4
Aug 2011						12					81					7					+5					50.6
Jul 2011						13					80					7					+6					50.4
Jun 2011						18					78					4					+14					56.3

Inventories

The Inventories Index registered 52 percent in September, 0.3 percentage point lower than the 52.3 percent reported in August. 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 eight industries reporting higher inventories in September — listed in order — are: Wood Products; Apparel, Leather & Allied Products; Machinery; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Petroleum & Coal Products; Miscellaneous Manufacturing; and Transportation Equipment. The seven industries reporting decreases in inventories in September — listed in order — are: Nonmetallic Mineral Products; Furniture & Related Products; Fabricated Metal Products; Chemical Products; Paper Products; Electrical Equipment, Appliances & Components; and Primary Metals.

Inventories						%Higher					%Same					%Lower					Net					Index
Sep 2011						23					58					19					+4					52.0
Aug 2011						23					63					14					+9					52.3
Jul 2011						18					60					22					-4					49.3
Jun 2011						23					61					16					+7					54.1

Customers’ Inventories(c)

The ISM Customers’ Inventories Index registered 49 percent in September, 2.5 percentage points higher than in August when the index registered 46.5 percent. This is the 30th 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 six manufacturing industries reporting customers’ inventories as being too high during September — listed in order — are: Miscellaneous Manufacturing; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Computer & Electronic Products; and Machinery. The seven industries reporting customers’ inventories as too low during September — listed in order — are: Textile Mills; Furniture & Related Products; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Transportation Equipment; and Electrical Equipment, Appliances & Components.

Customers’ Inventories						% Reporting			%Too High			%About Right			%Too Low			Net			Index
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
Jun 2011						70			13			68			19			-6			47.0

Prices(c)

The ISM Prices Index registered 56 percent in September, 0.5 percentage point higher than the 55.5 percent reported in August. This is the fifth consecutive month the Prices Index has registered below 80 percent since December 2010, and is the 27th consecutive month the index has registered above 50 percent. While 26 percent of respondents reported paying higher prices and 14 percent reported paying lower prices, 60 percent of supply executives reported paying the same prices as in August. A Prices Index above 49.4 percent, over time