March ISM report: Full speed ahead on growth

Manufacturing winning streak hits 34 months as economy continues steady growth

04/03/2012


The manufacturing surge continues to steam toward three full years of growth, according to the March report of the Institute for Supply Management.

Manufacturing activity grew for the 32nd consecutive month in March, and the overall economy grew for the 34th straight month. The PMI Index, the core reporting number of the ISM survey, rose from 52.4% to 53.4%, marking almost three years that the PMI had registered above 50%, the survey’s base growth figure.

“The past relationship between the PMI and the overall economy indicates that the average PMI for January through March (53.3%) corresponds to a 3.6% increase in real gross domestic product,” said report author Bradley J. Holcomb, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee. “In addition, if the PMI for March (53.4%) is annualized, it corresponds to a 3.7% increase in real GDP annually.”

The Production Index increased 3 percentage points from February’s reading of 55.3% to 58.3%, and the Employment Index increased 2.9 percentage points to 56.1%. Of the 18 industries included in the survey, 15 are experiencing overall growth.

Of perhaps equal importance is the bullish comments made by survey participants.  “Business is robust, driven by a healthy demand for exports and relatively stable raw materials,” said a chemical products manufacturer.

 “Our customers are reporting a potential 10% to 13% increase in purchases for 2012,” added a machinery manufacturer. “Actual orders continue to be slow to appear, but expectations continue to be high.”

“We have been experiencing 6% annual growth and expect that to continue in the near term,” said a producer in the food and beverage industry.

MANUFACTURING AT A GLANCE MARCH 2012

 

Index

 

 

 

 

 

Series
Index
Mar

 

 

 

 

 

Series
Index
Feb

 

 

 

 

 

Percentage
Point
Change

 

 

 

 

 

Direction

 

 

 

 

 

Rate of
Change

 

 

 

 

 

Trend(a)
(Months)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PMI

 

 

 

 

 

53.4

 

 

 

 

 

52.4

 

 

 

 

 

+1.0

 

 

 

 

 

Growing

 

 

 

 

 

Faster

 

 

 

 

 

32

 

New Orders

 

 

 

 

 

54.5

 

 

 

 

 

54.9

 

 

 

 

 

-0.4

 

 

 

 

 

Growing

 

 

 

 

 

Slower

 

 

 

 

 

35

 

Production

 

 

 

 

 

58.3

 

 

 

 

 

55.3

 

 

 

 

 

+3.0

 

 

 

 

 

Growing

 

 

 

 

 

Faster

 

 

 

 

 

34

 

Employment

 

 

 

 

 

56.1

 

 

 

 

 

53.2

 

 

 

 

 

+2.9

 

 

 

 

 

Growing

 

 

 

 

 

Faster

 

 

 

 

 

30

 

Supplier Deliveries

 

 

 

 

 

48.0

 

 

 

 

 

49.0

 

 

 

 

 

-1.0

 

 

 

 

 

Faster

 

 

 

 

 

Faster

 

 

 

 

 

2

 

Inventories

 

 

 

 

 

50.0

 

 

 

 

 

49.5

 

 

 

 

 

+0.5

 

 

 

 

 

Unchanged

 

 

 

 

 

From Contracting

 

 

 

 

 

1

 

Customers’ Inventories

 

 

 

 

 

44.5

 

 

 

 

 

46.0

 

 

 

 

 

-1.5

 

 

 

 

 

Too Low

 

 

 

 

 

Faster

 

 

 

 

 

4

 

Prices

 

 

 

 

 

61.0

 

 

 

 

 

61.5

 

 

 

 

 

-0.5

 

 

 

 

 

Increasing

 

 

 

 

 

Slower

 

 

 

 

 

3

 

Backlog of Orders

 

 

 

 

 

52.5

 

 

 

 

 

52.0

 

 

 

 

 

+0.5

 

 

 

 

 

Growing

 

 

 

 

 

Faster

 

 

 

 

 

3

 

Exports

 

 

 

 

 

54.0

 

 

 

 

 

59.5

 

 

 

 

 

-5.5

 

 

 

 

 

Growing

 

 

 

 

 

Slower

 

 

 

 

 

5

 

Imports

 

 

 

 

 

53.5

 

 

 

 

 

54.0

 

 

 

 

 

-0.5

 

 

 

 

 

Growing

 

 

 

 

 

Slower

 

 

 

 

 

4

 

OVERALL ECONOMY

 

Manufacturing Sector

 

 

 

 

 

Growing

 

 

 

 

 

Faster

 

 

 

 

 

34

 

 

 

 

 

Growing

 

 

 

 

 

Faster

 

 

 

 

 

32

 

(a) Number of months moving in current direction

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 percent, over a period of time, generally indicates an expansion of the overall economy.

- Edited by Chris Vavra, Plant Engineering, www.plantengineering.com 



No comments
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.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
2016 Product of the Year; Diagnose bearing failures; Asset performance management; Testing dust collector performance measures
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

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.
This article collection contains several articles on the vital role of plant safety and offers advice on best practices.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me