PMI index dips in March, but stays on growth path

Unexpected drop to 51.3% disappoints analysts, stock market

04/02/2013


Institute of Supply Management logo. Courtesy: ISMThe Institute for Supply Management’s monthly PMI report was a mixed bag for March. While manufacturing activity grew for the fourth straight month and the overall economy approached four years of sustained growth, the PMI Index for March was sharply lower.

The March PMI was 51.3%, 2.9 percentage points down from the February level of 54.2% and lower than industry analysts expected. The lower reading was reportedly one reason stocks slumped on April 1. The downturn was the first since October 2012, though the reading still points to growth in the manufacturing sector.

Bradley J. Holcomb, chairman of the Institute for Supply Management Manufacturing Business Survey Committee said the latest number is “indicating expansion in manufacturing for the fourth consecutive month, but at a slower rate. Both the New Orders and Production Indexes reflected growth in March compared to February, albeit at slower rates.”

The report quoted survey respondents as indicating growth and optimism, but with some tempering. Among the comments included with the PMI report:

  • “Beginning to feel the seasonal upswing in business. Energy and resin remain a concern.” (Food, Beverage & Tobacco Products)
  • “While the second half of 2013 looks promising, the first half is a mixed bag.” (Computer & Electronic Products)
  • “Things seem slightly better than last year, but still not great.” (Printing & Related Support Activities)
  • “Automotive is still very strong.” (Fabricated Metal Products)
  • “Post-election in the U.S., companies within the oil and gas sector are still waiting for signs of some regulatory certainty or stability.” (Petroleum & Coal Products)

A PMI above 42.2% indicates general growth in the overall economy, which meant March’s number were the 46th straight month of overall economic growth. “The past relationship between the PMI and the overall economy indicates that the average PMI for January through March (52.9%) corresponds to a 3.3% increase in real gross domestic product on an annualized basis,” Holcomb said. “In addition, if the PMI for March (51.3%) is annualized, it corresponds to a 2.8% increase in real GDP annually.”

THE LAST 12 MONTHS



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...
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
World-class maintenance: The three keys to success - Deploy people, process and technology; 2016 Lubrication Guide; Why hydraulic systems get hot
Your leaks start here: Take a disciplined approach with your hydraulic system; U.S. presence at Hannover Messe a rousing success
Flexible offshore fire protection; Big Data's impact on operations; Bridging the skills gap; Identifying security risks
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Putting COPS into context; Designing medium-voltage electrical systems; Planning and designing resilient, efficient data centers; The nine steps of designing generator fuel 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 that compressed air plays in manufacturing plants.
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