September ISM Report Reaches Highest Level for the Year

October 1, 2013

The ISM PMI  report issued today  is the highest reading for the year to date. 

Highest value of the year.

Highest value of the year.

PMPA’s Business Trends Index for August was up substantially (6.7%),  and we believe that the PMPA index is a leading indicator for industrial activity. ( You can’t ship your manufactured goods if our precision machined components aren’t in them.)

Leading indicator?

Leading indicator?

The September ISM PMI reaching its high for the year validates our belief in the Business Trends as a leading indicator.

The PMI™ registered 56.2 percent, an increase of 0.5 percentage point from August’s reading of 55.7 percent. September’s PMI™ reading is the highest of the year, leading to an average PMI™ reading of 55.8 percent for the third quarter. The New Orders Index decreased in September by 2.7 percentage points to 60.5 percent, and the Production Index increased by 0.2 percentage point to 62.6 percent. The Employment Index registered 55.4 percent, an increase of 2.1 percentage points compared to August’s reading of 53.3 percent, which is the highest reading for the year.“- Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee.

As businessmen and women, we’re obviously pleased with the Increase in the PMI.
However, The employment index also reached its highest point for the year to 55.4, up 2.1 %.

We continue to be optimistic about employment opportunities in advanced manufacturing, and ISM report supports our claim for this too.

ISM PMI Sept 2013

Fred NAPM


USA Leads Global Recovery-Evidence

February 6, 2012

Leadership is about action, not potential. Global Purchasing Managers Index (PMI) data shows that it is the USA, not China, that is leading the world out of the slowdown.

Maybe the term SHOULD be U-BRIC

Here are 5 reasons that PMI data is relevant evidence for your analysis

  • PMI is a reliable fact-based indicator as opposed to opinion or confidence-based indicators.
  • PMI is produced monthly, faster than comparable official data series.
  • PMI covers almost all private sector economic activity in many countries (including the all-important service sectors).
  • PMI are not revised after publication.
  • PMI are produced using the same methodology in all countries where they are produced- assuring comparability.

While we associate the PMI data with the Institute for Supply Management, the fact is that Markit Economics is the firm doing the actual surveys and reporting.

How do you read the above PMI Data?

Graph

MARKIT


Manufacturing Growth Confirmed by December Data

January 6, 2010

The December ISM Purchasing Managers Report confirms that manufacturing continues its recovery and growth – the PMI was up 2.3 points to 55.9%.

 “The manufacturing sector grew for the fifth consecutive month in December as the PMI rose to 55.9 percent, its highest reading since April 2006 when it registered 56 percent. This month’s report is quite strong as both the New Orders and Production Indexes are above 60 percent. The sector may be benefiting from an excessive destocking cycle as indicated by the recent performance of the Customers’ Inventories Index. Customers’ inventories have been ‘too low’ for nine consecutive months, and this month’s index is the lowest reading since the inception of the index in January 1997. Overall, the recovery in manufacturing is continuing, but there are still some industries mired in the downturn as evidenced by the seven industries still in decline.”

Fabricated Metal Products (NAICS 332)*  is one of those  seven industries “still mired in the downturn.” In December  the fabricated metals respondents reported decreases in  backlog,  employment,  customer inventories, and lower prices for materials. On the bright side, both production and  export orders grew for this sector in December 2009.

Fabricated metals may not be out of the woods yet, but...

We may not be out of the woods yet as an industry,   but the sustained low employment and low customer inventories for our industry tell me that the overtime production machine will be gearing up and starting to hum for many of our shops this month.

Bottom Line: Dr. Ken Mayland of Clearview Economics had this to say about the ISM Composite Report for December:

“…if the current reading were to be sustained, that would be consistent with 4.6% real GDP growth.  Folks: that’s “good” growth!”

* Precision Machining  Industry is NAICS 332721, and thus a segment of Fabricated Metal Products Sector.

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Manufacturing Growth Suggested by ISM Survey

August 4, 2009

The Institute of Supply Management said its index of the manufacturing sector, also known as the Purchasing Managers Index, rose to 48.9 percent from 44.8 percent in June.

That figure was better than Wall Street’s expected  level of 46.5 percent and closer to the 50 percent level that separates expansion and contraction. 48.9% is knocking on 50%’s door…

The ISM said that although the factory sector contracted for an 18th consecutive month, the decline was modest and suggested the slump is ending.

“It would be difficult to convince many manufacturers that we are on the brink of recovery, but the data suggests that we will see growth in the third quarter if the trends continue,” according to ISM survey chief Norbert Ore.

Additionally, the survey showed  growth in both the new orders and production sub-indexes. The survey also indicates that  the headline index was pulled down by weakness in inventories and lingering declines in employment.

We don’t think that it would be difficult to convince our members that “Now is the time,” for the orders to appear. We just hope that we can all have access to credit to cover our payrolls while we wait for payment on the new business that is imminent.

According to the NSBA’s July  Report , access to capital continues to be a major issue, with 80 percent of small-business owners negatively impacted by the credit crunch—up from 67 percent one year ago. Sixty-eight percent reported worsening terms on their credit cards and 38 percent were subject to a decrease on their lines of credit or credit cards.

It takes energy, machinists, materials and supplies to keep our machines running. And all of those require working capital.

Recovery may be imminent, but its duration will be measured by our ability to fund our work.

What has your shop done that is out of the box to stay ‘in the game?’

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