ISM Report: Manufacturing slumps for second straight month

ISM index hovers just below 50 as uncertainty slows growth

08/02/2012


Institute of Supply Management logo. Courtesy: ISMEconomic activity in the manufacturing sector contracted in July for the second time since July 2009; however, the overall economy grew for the 38th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued Aug. 1 by Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee. The PMI registered 49.8%, an increase of 0.1 percentage point from June's reading of 49.7%, indicating contraction in the manufacturing sector for the second consecutive month, following 34 consecutive months of expansion.

The New Orders Index registered 48%, an increase of 0.2 percentage point from June and indicating contraction in new orders for the second consecutive month, but at a slightly slower rate. Both the Production Index and the Employment Index remained in growth territory, registering 51.3% and 52%, respectively. The Prices Index for raw materials registered 39.5%, an increase of 2.5 percentage points from the June reading of 37%, indicating lower prices on average for the third consecutive month. “A growing number of comments from the panel this month reflect a slowdown in their businesses and general concern over increasing economic uncertainty,” Holcomb said.

Manufacturing contracted in July as the PMI registered 49.8%, an increase of 0.1 percentage point when compared to June's reading of 49.7%. 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. Therefore, the July PMI indicates growth for the 38th consecutive month in the overall economy, but indicates contraction in the manufacturing sector for the second time since July 2009, when the PMI registered 49.2%. 

The last 12 months of PMI 

Month

 

PMI

 

 

 

Month

 

PMI

 

Jul 2012

 

49.8

 

 

 

Jan 2012

 

54.1

 

Jun 2012

 

49.7

 

 

 

Dec 2011

 

53.1

 

May 2012

 

53.5

 

 

 

Nov 2011

 

52.2

 

Apr 2012

 

54.8

 

 

 

Oct 2011

 

51.8

 

Mar 2012

 

53.4

 

 

 

Sep 2011

 

52.5

 

Feb 2012

 

52.4

 

 

 

Aug 2011

 

52.5

 

Average for 12 months – 52.5
High – 54.8
Low – 49.7

 



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...
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.