ISM Report: PMI hovers below break-even again in August

Institute for Supply Management index remains just under 50 mark for third straight month.


Institute of Supply Management logo. Courtesy: ISMManufacturing sector activity in August remained barely below the break-even line for the third consecutive month, according to the Institute of Supply Management’s monthly PMI Report.

The PMI registered 49.6%, a decrease of 0.2 percentage point from July's reading of 49.8%, indicating contraction in the manufacturing sector for the third consecutive month. This is also the lowest reading for the PMI since July 2009. The New Orders Index registered 47.1%, a decrease of 0.9 percentage point from July, indicating contraction in new orders for the third consecutive month.

The Production Index registered 47.2%, a decrease of 4.1 percentage points and indicating contraction in production for the first time since May 2009. The Employment Index remained in growth territory at 51.6%, but registered its lowest reading since November 2009 when the Employment Index registered 51%. The Prices Index increased 14.5 percentage points from its July reading to 54%. Comments from the panel generally reflect a slowdown in orders and demand, with continuing concern over the uncertain state of global economies.

"Internal indicators and feedback from sales channels are indicating a slowdown in manufacturing contracted in August as the PMI registered 49.6%, a decrease of 0.2 percentage point when compared to July's reading of 49.8%. 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 42.6%, over a period of time, generally indicates an expansion of the overall economy. Tthe August PMI indicates growth for the 39th consecutive month in the overall economy, but indicates contraction in the manufacturing sector for the third time since July 2009, when the PMI registered 49.2%.

The past relationship between the PMI and the overall economy indicates that the average PMI for January through August (52.2%) corresponds to a 3.2% increase in real gross domestic product. In addition, if the PMI for August (49.6%) is annualized, it corresponds to a 2.4% increase in real GDP annually.

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.