March ISM report: Full speed ahead on growth
Manufacturing winning streak hits 34 months as economy continues steady growth
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
|
|
| Series
|
|
| Percentage
|
|
| Direction
|
|
| Rate of
|
|
| Trend(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
- Related News:
ISM Report: PMI hovers below break-even again in August - 07.09.2012 14:30- ISM Report: Manufacturing’s streak rolls on at a slower pace - 01.06.2012 14:03
- ISM forecast: Spending, revenues both expected to keep climbing - 11.05.2012 10:19
- ISM report: Manufacturing growth expands in April - 02.05.2012 10:46
- Survey: Hiring, cap ex spending to keep rising - 01.05.2012 14:53
- ISM: Manufacturing growth continues, but slows - 02.03.2012 10:34
- ISM shows manufacturing growing at a quicker pace - 01.02.2012 14:16
- ISM data showed manufacturing accelerated in Dec. 2011 - 05.01.2012 10:17
- ISM: Manufacturing index rises in November - 09.12.2011 09:17
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.
2012 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.