ISM report: Manufacturing growth still on the upswing
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.