Manufacturing index slides in August

The Purchasing Manufacturers' Index (PMI) fell 3.2 points to 49.4% due to a general slowdown in the manufacturing industry.


Image courtesy: CFE MediaWhether it was just a summer vacation of a sign of tightening in the manufacturing market, the monthly purchasing manufacturers index (PMI) plunged 3.2 percentage points in August to 49.4%. It's the first time in six months the PMI has falling below the 50% mark, which indicates a contraction in the manufacturing sector.

"Only six of our 18 industries reported an increase in new orders in August (down from 12 in July), and only eight of our 18 industries reported an increase in production in August (down from nine in July)," said Bradley J. Holcomb, chairman of the Institute for Supply Management's (ISM) Manufacturing Business Survey Committee.

It was the first time the PMI had fallen below 50% since a 49.5% reading in February. Since then, the PMI has been solidly above 50%, reaching 53.2% in June, and there were no signs that the index would fall below the 50% growth rate in August.

The contraction was broad-based and extensive. The New Orders Index plunged 7.8 percentage points to 49.1%. The Production Index dropped 5.8 percentage points to 49.6%, and the Employment Index dropped 1.1 percentage points to 48.3%. That malaise also was reflected in committee member comments for the month, although some sectors reported positive trends. The comments included:

  • "We have been getting lots of inquiries, but not a lot of sales order placements." (Chemical Products)
  • "Business was flat this month overall." (Computer & Electronic Products)
  • "Commercial construction continues to be strong, and therefore our business is very good." (Fabricated Metal Products)
  • "New product distribution is increasing." (Food, Beverage & Tobacco Products)
  • "This past month, sales increased over the trend from the first half of the year. There seems to be a general, albeit slight, loosening of capital purse strings." (Machinery)
  • "Medical device is still strong." (Miscellaneous Manufacturing)
  • "Business conditions are generally flat." (Transportation Equipment)
  • "Hard to find production associates. Unemployment in the area is around 4%. Can't get enough employees [which] leads to lots of overtime." (Plastics & Rubber Products)
  • "Oil prices continue to seek a 'footing'; rig count slowly increasing." (Petroleum & Coal Products).

Bob Vavra is content manager, CFE Media,

The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
Doubling down on digital manufacturing; Data driving predictive maintenance; Electric motors and generators; Rewarding operational improvement
2017 Lubrication Guide; Software tools; Microgrids and energy strategies; Use robots effectively
Prescriptive maintenance; Hannover Messe 2017 recap; Reduce welding errors
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Research team developing Tesla coil designs; Implementing wireless process sensing
Commissioning electrical systems; Designing emergency and standby generator systems; Paralleling switchgear generator systems
Natural gas engines; New applications for fuel cells; Large engines become more efficient; Extending boiler life

Annual Salary Survey

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

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.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me