‘Business is booming’ and so is the PMI Index

ISM report hits 12-month high, climbs for the 5th straight month

By Bob Vavra, Content Manager, Plant Engineering November 4, 2013

One industry leader in the textile industry suggested that “new business is booming” and the October Institute for Supply Management PMI index shows the same trend.

The PMI jumped to a new 12-month high of 56.4% in October, up two-tenths from September’s figure. The results came in the same month as the two-week federal government shutdown, and while the PMI didn’t drop as a result, ISM officials said their reporting members were mixed about its actual impact on the manufacturing sector.

“The panel’s comments are generally positive about the current business climate; however, there are mixed responses on whether the government shutdown and potential default have had any effect on October’s results,” said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

Overall, the PMI grew for the fifth straight month, and since slipping to 49.0 in March, the PMI has risen 15% in the next five months. The New Orders Index and Production Index each finished above 60% for the third straight month, indicating strong demand.

Many of the monthly comments about the manufacturing sector focused on the government shutdown or the prospects for the holiday shopping season. Among the comments:

  • “New business is booming.” (Textile Mills)
  • “The government shutting down and threatening to go into a default position is causing all kinds of concerns in our markets.” (Fabricated Metal Products)
  • “The government shutdown has not had any impact on our business that I can determine, nor has it impacted any supplier shipments.” (Chemical Products)
  • “Government spending continues to be slow in defense and military. The government shutdown and debt ceiling crisis did not affect business.” (Transportation Equipment)
  • "Telecom market — wireless and VOIP — appear to be spiking. We are very busy; busier than we have ever been." (Computer & Electronic Products)
  • “Seasonal demand has not decreased at the typical pace. Market showing resiliency in the residential market.” (Primary Metals)
  • “Business continues to improve every month for the past nine months.” (Furniture & Related Products)
  • “Big box store discounting providing increased sales bump short term.” (Food, Beverage & Tobacco Products)
  • “Our customers continue to be cautious and are closely managing their purchases. Business continues to be flat to slightly down.” (Machinery)
  • “Outlook on general appliance market continues in a positive direction. Uncertainty, however, looms with unclear government direction pending.” (Electrical Equipment, Appliances & Components)

The Last 12 Months