Manufacturing index rebounds in September

The Purchasing Manufacturers' Index moved out of contraction in September with 51.5%, which is two points higher than in August.
By Chris Vavra, production editor, CFE Media October 3, 2016

Image courtesy: CFE MediaAfter August’s Institute for Supply Management’s (ISM) Purchasing Managers Index (PMI) reported slide into contraction, the manufacturing industry rebounded in September. The index registered 51.5%, which is a jump of 2.1% from August. A strong jump in new orders and production helped the manufacturing sector as a whole in September.

"Manufacturing expanded in September following one month of contraction in August, with nine of the 18 industries reporting an increase in new orders in September (up from six in August), and 10 of the 18 industries reporting an increase in production in September (up from eight in August)," said Bradley J. Holcomb, chairman of the Institute for Supply Management’s (ISM) Manufacturing Business Survey Committee. The New Orders Index registered 55.1%, an increase of 6 percentage points.

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. Courtesy: CFE MediaThe production index registered 52.8%, 3.2 percentage points higher than the August reading. The employment index registered 49.7%, an increase of 1.4 percentage points. The prices index registered 53% in September, the same reading as in August, indicating higher raw materials prices. Comments included:

  • "Domestic and international sales moving up slightly." (Chemical Products)
  • "Negotiating prices down on all metals." (Computer & Electronic Products)
  • "Business is still strong, but we are seeing some pushouts from certain consumer market products." (Primary Metals)
  • "Sales on the increase and positive outlook for the remainder of 2016." (Fabricated Metal Products)
  • "Good growing conditions for this year’s corn and soybean crop has the protein market anticipating large supplies and lower cost of goods for 2017." (Food, Beverage & Tobacco Products)
  • "General business conditions are slowly improving with increased sales and sales leads." (Machinery)
  • "Some concern about fallout from the Hanjin Shipping bankruptcy. Spending time tracking containers — alternatives. Also, predicated on the impact to worldwide rates, there is some concern around both capacity and ocean rates in the near – to midterm future." (Transportation Equipment)
  • "Demand increase after previous lackluster month. Some pre-buying activity underway by customers in advance of expected price increases." (Plastics & Rubber Products)
  • "Oil prices have increased with respect to the first quarter but they remain at low levels affecting our revenue and purchasing power." (Petroleum & Coal Products). 

Chris Vavra, production editor, CFE Media, cvavra@cfemedia.com.