Manufacturing contracts in November, ISM reports

Economic uncertainty blunts two straight months of growth

12/04/2012


Institute of Supply Management logo. Courtesy: ISMAfter two months of growth, the manufacturing sector contracted slightly in November, as the Institute for Supply Management’s PMI Index fell to 49.5%, just under the 50% threshold for growth.

The PMI had registered above 51% in September and October, reversing a dip below 50% in the summer. Economists with the ISM said economic uncertainty both in the U.S. and global contributed to the decline.

“Comments from the panel this month generally indicate that the second half of the year continues to show a slowdown in demand; respondents also express concern over how and when the fiscal cliff issue will be resolved," said Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee. “The PMI registered 49.5%, a decrease of 2.2 percentage points from October's reading of 51.7%, indicating contraction in manufacturing for the fourth time in the last six months. This month's PMI reading reflects the lowest level since July 2009 when the PMI registered 49.2%.

While the Production Index registered 53.7%, indicating growth in production for the second consecutive month, the Employment Index registered 48.4%, a decrease of 3.7 percentage points, which is the index's lowest reading since September 2009 when the Employment Index registered 47.8 %.

One respondent told the survey committee, “Business is steady, but not much more than that. We are in a lull." Another commented, “The principle business conditions that will affect the company over the next three or four quarters will be the U.S. federal government tax and budgetary policies; the impact of those policies is not yet clear.”

Since the PMI was above 42.6%, which is the threshold for overall economic growth, November marked the 42nd consecutive month of growth, according to the PMI Index. “The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (51.8%) corresponds to a 3.1% increase in real gross domestic product,” Holcomb said. “In addition, if the PMI for November (49.5%) is annualized, it corresponds to a 2.3% increase in real GDP annually."

THE LAST 12 MONTHS

Month

 

PMI™

 

 

 

Month

 

PMI™

 

Nov 2012

 

49.5

 

 

 

May 2012

 

53.5

 

Oct 2012

 

51.7

 

 

 

Apr 2012

 

54.8

 

Sep 2012

 

51.5

 

 

 

Mar 2012

 

53.4

 

Aug 2012

 

49.6

 

 

 

Feb 2012

 

52.4

 

Jul 2012

 

49.8

 

 

 

Jan 2012

 

54.1

 

Jun 2012

 

49.7

 

 

 

Dec 2011

 

53.1

 

Average for 12 months – 51.9
High – 54.8
Low – 49.5

 



, WA, United States, 12/13/12 03:03 PM:

As the world economy is uncertain, supply and demand is more criticle. The fact that China is seeing fluctuations in their low tech. mfg. markets is cause for concern. As the west retools with high end Mfg. technology we are seeing more company profits returning. We need more IP, better qualified H.S. grads & opportunities for Skills experiance.
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...
2015 Top Plant: Phoenix Contact, Middletown, Pa.; 2015 Best Practices: Automation, Electrical Safety, Electrical Systems, Pneumatics, Material Handling, Mechanical Systems
A cool solution: Collaboration, chemistry leads to foundry coat product development; See the 2015 Product of the Year Finalists
Raising the standard: What's new with NFPA 70E; A global view of manufacturing; Maintenance data; Fit bearings properly
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
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
Migrating industrial networks; Tracking HMI advances; Making the right automation changes
Understanding transfer switch operation; Coordinating protective devices; Analyzing NEC 2014 changes; Cooling data centers
Upgrading secondary control systems; Keeping enclosures conditioned; Diagnostics increase equipment uptime; Mechatronics simplifies machine design

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.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.