ISM data jumps back above growth threshold

PMI at 50.9% is 1.9 points higher than May, signaling improving conditions overall

07/02/2013


A boost in new orders and production data helped manufacturing avoid a June swoon, according to the latest data from the Institute for Supply Management.

The manufacturing benchmark jumped 1.9 percentage points in June to reverse its first loss of 2013 and finish above the 50% mark indicating growth in the sector. The 50.9% reading was not just higher than the 49.0% in May; it also was 0.3 percentage points higher than the April reading.

While manufacturing had shown expansion during the first quarter of 2013, it had been at an increasingly slower pace, and May’s reading indicating contraction in the sector was a worrisome sign for some. June’s data signaled at least a return to growth for manufacturing.

The ISM’s New Order Index jumped 3.1 points to 51.9%, while the production index rose 4.8 points to 53.4 %

Not all the news was great, according to Bradley Holcomb, chairman of the ISM Manufacturing Business Survey Committee. That especially was true on the jobs front. “The Employment Index registered 48.7%, a decrease of 1.4 percentage points compared to May's reading of 50.1%. Manufacturing employment contracted for the first time since September 2009, when the index registered 47.8%,” said Holcomb. “The Prices Index registered 52.5%, increasing 3 percentage points from May, indicating that overall raw materials prices increased from last month. Comments from the panel generally indicate slow growth and improving business conditions.”

That was reflected in quotes from various parts of the sector. Among the comments:

  • “Business remains good to improving.” (Miscellaneous Manufacturing)
  • “Industry volumes picking up with improved housing starts.” (Electrical Equipment, Appliances & Components)
  • “Indications are that customers have acceptable inventory levels, and as a result, are backing down on new orders and reassessing market conditions.” (Wood Products)
  • “Seeing signs of life through summer retail [sales] promotions — still an overall soft market.” (Food, Beverage & Tobacco Products)
  • “June sales appear to have rebounded from what was a lackluster May.” (Paper Products)
  • “Slow growth continues to choke the recovery. We are not out of the woods yet by any stretch of the imagination.” (Chemical Products)

The improved ISM data also moved the index past the four-year mark in overall growth. A PMI Index above 42.2% indicates overall growth in the economy, a figure it has reached for the 49th consecutive month. Holcomb said the index indicates overall GDP growth for the first half of 2013 at between 2.7% and 2.9%.

THE LAST 12 MONTHS



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Your leaks start here: Take a disciplined approach with your hydraulic system; U.S. presence at Hannover Messe a rousing success
Hannover Messe 2016: Taking hold of the future - Partner Country status spotlights U.S. manufacturing; Honoring manufacturing excellence: The 2015 Product of the Year Winners
Inside IIoT: How technology, strategy can improve your operation; Dry media or web scrubber?; Six steps to design a PM program
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
Warehouse winter comfort: The HTHV solution; Cooling with natural gas; Plastics industry booming
Managing automation upgrades, retrofits; Making technical, business sense; Ensuring network cyber security
Designing generator systems; Using online commissioning tools; Selective coordination best practices

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me