ISM Report: Manufacturing’s streak rolls on at a slower pace

Sector still expanding, but rate drops off April’s high point


Institute of Supply Management logo. Courtesy: ISMManufacturing’s three-year growth streak continued in May, albeit at a slower pace than in April, according to the latest Institute for Supply Management manufacturing report.

The manufacturing sector expanded for the 34th straight month and the nation’s overall economy hit the three-year mark in growth, according to the report, issued by the ISM’s Manufacturing Business Survey Committee.

“The PMI registered 53.5% a modest decrease of 1.3 percentage points from April's reading of 54.8% indicating expansion in the manufacturing sector for the 34th consecutive month,”  said committee chair Bradley J. Holcomb, CPSM, CPSD. “The New Orders Index continued its growth trend for the 37th consecutive month, registering 60.1% in May. This represents an increase of 1.9 percentage points from April and also the highest level recorded by the index since April 2011.” A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.

“The Prices Index for raw materials fell to 47.5% in May, dropping 13.5 percentage points from April, indicating lower prices for the first time since December 2011,” Holcomb added. “Comments from the panel generally reflect stable-to-strong orders, with sales showing steady improvement over the first five months of 2012.”

Despite a slowing in jobs growth in May, comments from survey participants were generally bullish. “Business has been trending moderately higher since the beginning of the year,” said one chemical products manufacturer. “(We) anticipate 5% to 7% growth for the year.”

“Sales were stronger than expected; customers are waiting until the last minute to place orders,” added a machinery manufacturer.

“We are having the best year in sales volume and profit since mid-2008,” said a fabricated metal products manufacturer.

A PMI in excess of 42.6% over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 36th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 34th consecutive month. “The past relationship between the PMI and the overall economy indicates that the average PMI for January through May (53.6%) corresponds to a 3.7% increase in real gross domestic product,” said Holcomb. “In addition, if the PMI for May (53.5%) is annualized, it also corresponds to a 3.7% increase in real GDP annually.” 

Last 12 months











May 2012






Nov 2011




Apr 2012






Oct 2011




Mar 2012






Sep 2011




Feb 2012






Aug 2011




Jan 2012






Jul 2011




Dec 2011






Jun 2011




Average for 12 months – 53.1
High – 55.8
Low – 51.4


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...
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

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 of plant safety and offers advice on best practices.
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