ISM: Manufacturing index rises in November

Growth pace accelerates to highest level since June


Economic activity in the manufacturing sector expanded in November for the 28th consecutive month, and the overall economy grew for the 30th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued today by Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The PMI registered 52.7% an increase of 1.9 percentage points from October's reading of 50.8% indicating expansion in the manufacturing sector for the 28th consecutive month,” Holcomb said. “The New Orders Index increased 4.3 percentage points from October to 56.7% reflecting the second month of growth after three months of contraction.

“While the Prices Index, at 45% increased 4 percentage points from the October reading of 41% prices of raw materials continued to decrease (registering below 50%) for the second consecutive month. Respondents cite continuing concerns about the general economic environment, government regulations and European financial conditions, but are cautiously more optimistic about the next few months based on lower raw materials pricing and favorable levels of new orders.”

What respondents are saying...

  • “Business still holding its own. Some growth in margin now that some of the raw materials prices have abated. Oil is pushing $100 so that has not been favorable.”
  • “Orders for the remaining two months have increased after an extended 'summer dip' in sales overall. We expect to finish the year approximately 10% above 2010.”
  • “Seeing a slight slowdown in orders; could be related to the holidays.”
  • “Material lead times are getting longer. Seems like no one is hiring. Trying to do twice the output with the same amount of people.”
  • “Japanese auto production has returned to 100% and domestic manufacturing continues to increase.”
  • “Oil exploration seems to be really picking up. Government is permitting again, so business is the busiest we've ever seen.”
  • “The EPS ruling about higher fees for coal-generated electricity can have a huge, negative impact on our business if implemented in January 2012. We are at the peak of our seasonal demand push.”
  • “Thailand flood impacting our business. Honda and Toyota cut production forecasts, and we are chasing some components made in Thailand.”

Manufacturing continued its growth in November as the PMI registered 52.7% an increase of 1.9 percentage points when compared to October's reading of 50.8%. A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.

A PMI in excess of 42.5% over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 30th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 28th consecutive month.

“The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (55.4%) corresponds to a 4.5% increase in real gross domestic product,” said Holcomb. “In addition, if the PMI for November (52.7%) is annualized, it corresponds to a 3.6% increase in real GDP annually.”

The last 12 months

Read the rest of the report here.

Institute for Supply Management

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 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...
Sister act: Building on their father's legacy, a new generation moves Bales Metal Surface Solutions forward; Meet the 2015 Engineering Leaders Under 40
2015 Mid-Year Report: Manufacturing's newest tool: In a digital age, digits will play a key role in the plant of the future; Ethernet certification; Mitigate harmonics; World class maintenance
2015 Lubrication Guide: Green and gold in lubrication: Environmentally friendly fluids and sealing systems offer a new perspective
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security
Cyber security attack: The threat is real; Hacking O&G control systems: Understanding the cyber risk; The active cyber defense cycle
Designing positive-energy buildings; Ensuring power quality; Complying with NFPA 110; Minimizing arc flash hazards
Building high availability into industrial computers; Of key metrics and myth busting; The truth about five common VFD myths
New industrial buildings: Greener, cleaner, leaner; New building designs for industry; Take a new look at absorption cooling; Offshored jobs start to come back

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

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.