“Manufacturing is ‘steady and strong’”
Manufacturing continued its hot streak in the summer of 2017, as the Institute for Supply Management’s (ISM) PMI manufacturing index hit 58.8% in August, its highest level in six years. The August reading was 2.5 percentage points above July’s 56.3 reading, and brought the 12-month average for the PMI to 55.1%—10% higher than the PMI’s growth threshold of 50.0%.
“Comments from the panel reflect expanding business conditions, with new orders, production, employment, backlog and exports all growing in August, as well as supplier deliveries slowing (improving) and inventories increasing during the period,” said Timothy R. Fiore, chairman of the ISM’s Manufacturing Business Survey Committee.
The PMI has been above 56.0% for all but two months of 2017, and even with readings of 54.8% in April and 54.9% in May, the index has averaged 56.7% for the year.
Comments from committee members reflect the enthusiasm in the manufacturing sector. Among the comments:
- "Steady demand across businesses." (Chemical Products)
- "Demand for light construction equipment continues strong; usually at this time of year, demand slackens." (Machinery)
- "Overall very steady; starting to pick up as expected." (Computer & Electronic Products)
- "Overall optimism about the market, both for 2017 and 2018." (Miscellaneous Manufacturing)
- "Business has strengthened over the summer, beyond (the) same period last year." (Paper Products)
- "Busy production month for August." (Textile Mills)
- "Sales remain strong month-to-month. (Transportation Equipment)
- "Slightly higher order intake." (Electrical Equipment, Appliances & Components)
- "Order board is very strong right now.” (Food, Beverage & Tobacco Products)
- "Business is steady and strong.” (Furniture & Related Products)
The PMI hasn’t been at this level since April 2011, when the index hit 59.1%. August also marked the 99th consecutive month of overall economic growth, and, if annualized, translates to a robust 4.9% increase in gross domestic product.
Bob Vavra, content manager, CFE Media, email@example.com.