PMI jumps again to new high for the year

Index hits 57.3% as strength in orders, hiring continues manufacturing’s surge


A change in seasons hasn’t slowed down manufacturing growth. In fact, there doesn’t seem to be much of anything slowing down the manufacturing sector.

The Institute for Supply Management’s PMI Manufacturing report for November registered its sixth straight increase, jumping almost a full percentage point to 57.3%. Industry analysts had expected a flat-to-lower report for November, but a strong surge in new orders and hiring helped propel the PMI to a new high for the year.

“The PMI has increased progressively each month since June,” said Bradley Holcomb, chairman of the ISM’s Manufacturing Business Survey Committee. “The New Orders Index increased in November by 3 percentage points to 63.6%, and the Production Index increased by 2 percentage points to 62.8%. The Employment Index registered 56.5%, an increase of 3.3 percentage points compared to October's reading of 53.2%. This reflects the highest reading since April 2012 when the Employment Index registered 56.8%.

“With 15 of 18 manufacturing industries reporting growth in November relative to October, the positive growth trend characterizing the second half of 2013 is continuing,” Holcomb added.

The PMI Index reached 57.3% as strength in orders, hiring continues manufacturing’s surge for the sixth straight month. Courtesy: Institute for Supply ManagementIndustry leaders also are bullish on the growth trajectory for manufacturing. Among the comments reported in the PMI report:

  • "Seasonal demand has not decreased at the typical pace." (Primary Metals)
  • "Incoming order rate remaining strong." (Fabricated Metal Products)
  • "Outlook for the remainder of the year and into 2014 is trending positive." (Chemical Products)
  • "Overall business climate is good. Business is steady." (Transportation Equipment)
  • "Sequestration and cutbacks in defense spending continue to impact business." (Computer & Electronic Products)
  • "Market continues to be stronger than normal for this time of year." (Wood Products)
  • "Getting much busier toward the end of the year." (Furniture & Related Products)
  • "Seeing consistent uptick in demand." (Food, Beverage & Tobacco Products)
  • "Ordering for 2014 seems to be increasing in comparison to the past six months." (Miscellaneous Manufacturing) 

Since the PMI dropped below the growth threshold of 50% with a 49.0% reading in May, the index has risen almost 17%. The PMI has been above 50% in every month but May this year, and has been above the 52% mark since June.

The overall economy has growth for the last 4 ½ years, according to the PMI, as a reading above 42.2 % reflects an increase in the overall economy, Holcomb said. “The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (53.7%) corresponds to a 3.6% increase in real gross domestic product (GDP) on an annualized basis,” he said. “In addition, if the PMI for November (57.3%) is annualized, it corresponds to a 4.7% increase in real GDP annually.”


No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 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...
Sister act: Building on their father's legacy, a new generation moves Bales Metal Surface Solutions forward; Meet the 2015 Engineering Leaders Under 40
2015 Mid-Year Report: Manufacturing's newest tool: In a digital age, digits will play a key role in the plant of the future; Ethernet certification; Mitigate harmonics; World class maintenance
2015 Lubrication Guide: Green and gold in lubrication: Environmentally friendly fluids and sealing systems offer a new perspective
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security
Cyber security attack: The threat is real; Hacking O&G control systems: Understanding the cyber risk; The active cyber defense cycle
Designing positive-energy buildings; Ensuring power quality; Complying with NFPA 110; Minimizing arc flash hazards
Building high availability into industrial computers; Of key metrics and myth busting; The truth about five common VFD myths
New industrial buildings: Greener, cleaner, leaner; New building designs for industry; Take a new look at absorption cooling; Offshored jobs start to come back

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

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.