ISM Report: Manufacturing’s streak rolls on at a slower pace

Sector still expanding, but rate drops off April’s high point


Institute of Supply Management logo. Courtesy: ISMManufacturing’s three-year growth streak continued in May, albeit at a slower pace than in April, according to the latest Institute for Supply Management manufacturing report.

The manufacturing sector expanded for the 34th straight month and the nation’s overall economy hit the three-year mark in growth, according to the report, issued by the ISM’s Manufacturing Business Survey Committee.

“The PMI registered 53.5% a modest decrease of 1.3 percentage points from April's reading of 54.8% indicating expansion in the manufacturing sector for the 34th consecutive month,”  said committee chair Bradley J. Holcomb, CPSM, CPSD. “The New Orders Index continued its growth trend for the 37th consecutive month, registering 60.1% in May. This represents an increase of 1.9 percentage points from April and also the highest level recorded by the index since April 2011.” A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.

“The Prices Index for raw materials fell to 47.5% in May, dropping 13.5 percentage points from April, indicating lower prices for the first time since December 2011,” Holcomb added. “Comments from the panel generally reflect stable-to-strong orders, with sales showing steady improvement over the first five months of 2012.”

Despite a slowing in jobs growth in May, comments from survey participants were generally bullish. “Business has been trending moderately higher since the beginning of the year,” said one chemical products manufacturer. “(We) anticipate 5% to 7% growth for the year.”

“Sales were stronger than expected; customers are waiting until the last minute to place orders,” added a machinery manufacturer.

“We are having the best year in sales volume and profit since mid-2008,” said a fabricated metal products manufacturer.

A PMI in excess of 42.6% over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 36th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 34th consecutive month. “The past relationship between the PMI and the overall economy indicates that the average PMI for January through May (53.6%) corresponds to a 3.7% increase in real gross domestic product,” said Holcomb. “In addition, if the PMI for May (53.5%) is annualized, it also corresponds to a 3.7% increase in real GDP annually.” 

Last 12 months











May 2012






Nov 2011




Apr 2012






Oct 2011




Mar 2012






Sep 2011




Feb 2012






Aug 2011




Jan 2012






Jul 2011




Dec 2011






Jun 2011




Average for 12 months – 53.1
High – 55.8
Low – 51.4


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...
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
Sister act: Building on their father's legacy, a new generation moves Bales Metal Surface Solutions forward; Meet the 2015 Engineering Leaders Under 40
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
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security
Upgrading secondary control systems; Keeping enclosures conditioned; Diagnostics increase equipment uptime; Mechatronics simplifies machine design
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

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.