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 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...
The true cost of lubrication: Three keys to consider when evaluating oils; Plant Engineering Lubrication Guide; 11 ways to protect bearing assets; Is lubrication part of your KPIs?
Contract maintenance: 5 ways to keep things humming while keeping an eye on costs; Pneumatic systems; Energy monitoring; The sixth 'S' is safety
Transport your data: Supply chain information critical to operational excellence; High-voltage faults; Portable cooling; Safety automation isn't automatic
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Maintaining low data center PUE; Using eco mode in UPS systems; Commissioning electrical and power systems; Exploring dc power distribution alternatives
Synchronizing industrial Ethernet networks; Selecting protocol conversion gateways; Integrating HMIs with PLCs and PACs
Why manufacturers need to see energy in a different light: Current approaches to energy management yield quick savings, but leave plant managers searching for ways of improving on those early gains.

Annual Salary Survey

Participate in the 2013 Salary Survey

In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.

Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.

2012 Salary Survey Analysis

2012 Salary Survey Results

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.