Manufacturing growth keeps blazing through 2017
PMI slips to 58.2% in November, but index is well above 10% growth rate for the year
Manufacturing’s hot streak continued in November, as the monthly PMI Index from the Institute for Supply Management remains above the 10% growth rate for the sixth consecutive month.
The November PMI checked in at 58.2%, down 0.5 percentage points from October’s 58.7 reading, but still solidly ahead of the 50% rating that signifies manufacturing growth. In fact, the PMI has been above the 55% level throughout 2017 with the exception of April and May, where it sat is 54.8% and 54.9% respectively. Since then, it never has been lower than July’s 56.3% reading, and is averaging 57.4% for the year.
“Comments from the panel reflect expanding business conditions, with New Orders and Production leading gains, employment expanding at a slower rate, order backlogs stable and expanding, and export orders all continuing to grow in November,” said Timothy R. Fiore, chairman of the Institute for Supply Management Manufacturing Business Survey Committee. “Supplier deliveries continued to slow, but at slower rates, and inventories continued to contract during the period. Price increases continued, but at a slower rate. The Customers’ Inventories Index improved but remains at low levels."
Committee members are not just satisfied with the current PMI levels, but also remain bullish for manufacturing as they look toward 2018. Among the committee comments”
- "Continuing to see more orders for the next six to 12 months." (Chemical Products)
- "Strong sales through third and now fourth quarters. Backlog increasing, and capacity at suppliers tightening." (Machinery)
- "Business has leveled out but remains strong heading into the end of the year." (Computer & Electronic Products)
- "We are just coming off a record sales year. We expect to continue in 2018 robust activity." (Miscellaneous Manufacturing)
- "We are seeing steady, consistent demand for end of year. We usually see a slowdown, which we haven’t seen yet." (Fabricated Metal Products)
- "Overall industry demand remains strong. Continue to have a healthy backlog of orders. Local economy is also strong, with a fairly tight labor market." (Transportation Equipment)
- "Business is strong. Employment is tight. Supplier deliveries have lengthened. A few suppliers are still blaming Hurricane Harvey for the lead times." (Food, Beverage & Tobacco Products)
- "Strong season demand for products and continued requirements for uptime." (Nonmetallic Mineral Products)
- "Currently, we have not experienced the typical seasonal slowdown toward the end of Q4. Could be that there is a lot of optimism in the American economy." (Plastics & Rubber Products)
Bob Vavra is content manager of Plant Engineering at CFE Media.