PMI rises for fourth straight month, hits 12-month high
The Institute for Supply Management's (ISM) purchasing manufacturers index (PMI) increased 1.9 percentage points to 53.2%, which marks the fourth straight month of growth.
Manufacturing continued its rally in 2016, as the Institute of Supply Management's (ISM) monthly index of manufacturing growth surged 1.9 percentage points to a 12-month high.
The June purchasing manufacturers' index (PMI) hit 53.2% as new orders and production continued to improve and manufacturers across the majority of industries surveyed continued to see solid growth.
Since plunging to 48.0% in December 2015, the PMI has shown steady improvement. It crossed the 50% threshold for manufacturing growth in March 2016, and June marked the fourth straight month of growth for the sector.
"Twelve of our 18 industries reported an increase in new orders in June (down from 14 in May), and 12 of our 18 industries reported an increase in production in June (same as in May)," said Bradley J. Holcomb, chairman of ISM's Manufacturing Business Survey committee.
While many committee members surveyed still are looking for stronger growth, most seemed satisfied with the current state of their businesses. Among the comments:
- "We are gaining new customers through better sales management." (Food, Beverage & Tobacco Products)
- "Slower shipments because of weather-related flooding." (Chemical Products)
- "Conditions have remained steady from (the) past month and are in line with our forecast." (Computer & Electronic Products)
- "Very good start of summer for business levels/orders." (Fabricated Metal Products)
- "Business is steady with some signs of increase." (Machinery)
- "Business is still strong, but slowing slightly." (Transportation Equipment)
- "Business conditions are good, production and demand are stable." (Miscellaneous Manufacturing)
- "Orders are slowing from China. American customers still steady." (Primary Metals)
- "Demand continues to be robust." (Plastics & Rubber Products)
- "Business is still slower than expected." (Nonmetallic Mineral Products)
The increase in the PMI in June pushed the 12-month average over the 50% growth threshold, and overall, the 53.2% level translates to a 3.2% annual growth rate in gross domestic product, Holcomb said.
Bob Vavra is content manager, Plant Engineering, CFE Media, firstname.lastname@example.org.
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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