Manufacturing index rebounds in March
The Purchasing Manufacturers' Index (PMI) reverses six-month slump with its third straight increase to 51.8% as production, new orders increase.
Reversing six months of decline in the manufacturing sector, the Institute for Supply Management's monthly Purchasing Manufacturers' Index (PMI) jumped 2.3 percentage points in March to 51.8%, putting the index solidly above the 50% growth threshold for the first time in 2016.
With new orders and production on the rise, the PMI Index rose to its highest level since a 51.9% reading in July 2015. The Index was last above the 50% growth mark with a 51.0% reading in August 2015. The PMI bottomed out in December at 2015 at 48.0% and had been inching higher in the first two months of 2016 before this month's sharp increase.
"Manufacturing registered growth in March for the first time since August 2015, as 12 of our 18 industries reported sector growth, and 13 of our 18 industries reported an increase in new orders in March," said Bradley Holcomb, chairman of the Institute for Supply Management's Manufacturing Business Survey Committee, which calculates the PMI each month. The Production Index and the New Orders Index led the change in the overall PMI growth. The Production Index was up 2.5 percentage points to 55.3% and the New Orders Index jumped 6.8 percentage points to 58.3%.
Shaking off prior concerns about the drop in oil prices and instability in some markets, survey respondents were equally enthused by the improving manufacturing sector. Among their comments:
- "Unemployment rate is low in our county, making it hard to find workers. We are understaffed and running lots of overtime." (Plastics & Rubber Products)
- "Business in telecom is booming. Fiber plant is at capacity." (Chemical Products)
- "Current trends remain steady. No issues with delivery or costs." (Computer & Electronic Products)
- "Capital equipment sales are steady." (Fabricated Metal Products)
- "Requests for proposals for new equipment [are] very strong." (Machinery)
- "Government is spending again. Have received delivery orders." (Transportation Equipment)
- "Things are starting to pick up. Our business is seasonal and it is that time of year." (Printing & Related Support Activities)
- "Business conditions are stable, little change from last month." (Miscellaneous Manufacturing)
- "Incoming sales are improving." (Furniture & Related Products)
- "Our business is still going strong." (Primary Metals)
- Bob Vavra, content manager, Plant Engineering, CFE Media, email@example.com.
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Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey