PMI jumps to a 3-year high in June

Manufacturing index hits 57.8% as production, new orders soar

07/10/2017


Manufacturing output surged in June to a three-year high, led by dramatic increases in new orders and production. The Institute for Supply Management's purchasing manufacturers' index (PMI) jumped 2.9 percentage points to 57.8% in June, the highest reading since the index hit 57.9% in August 2014. June was the 10th consecutive month the index finished above 50%, the threshold for manufacturing growth.

Timothy R. Fiore, chairman of the Institute for Supply Management's Manufacturing Business Survey Committee, said the index's component parts grew across the board. "Comments from the panel generally reflect expanding business conditions; with new orders, production, employment, backlog and exports all growing in June compared to May and with supplier deliveries and inventories struggling to keep up with the production pace."

Image courtesy: Bob Vavra, CFE MediaThe New Orders Index jumped 4 percentage points to 63.5%, while the Production Index climbed 5.3 percentage points to 63.5%. The Employment Index also increased sharply, up 3.7 percentage points to 57.2%.

Among the comment from committee members:

  • "Overall, business is strong. We are seeing price increases for packaging and handling materials as well as some MRO supplies." (Plastics & Rubber Products)
  • "Overall, demand is up 5% to 7% and expected to continue through the end of the year, at least." (Transportation Equipment)
  • "Demand is picking up; meeting budget expectations." (Electrical Equipment, Appliances & Components)
  • "Business is still very robust. Have continued to hire to match increased demand." (Computer & Electronic Products)
  • "Business globally continues to show improvement." (Chemical Products)
  • "Environmental regulations have strong effects on our business. We continue to watch for any changes as a result of the new (U.S.) administration." (Paper Products)
  • "International business outside North America on the upswing." (Machinery)
  • "Metal pricing continues to drag down our profit margins, but we are very busy quoting new business, so our customers have a good outlook on the rest of the year." (Fabricated Metal Products)
  • "Business is strong both domestically and internationally. Supplier deliveries are quick domestically, international supply chain is slowing. We are in a hiring mode." (Food, Beverage & Tobacco Products)

The June increase also marked 97 consecutive months of overall economic growth, finishing more than 33% above the economic growth mark of 43.3%.

Bob Vavra, content manager, CFE Media, bvavra@cfemedia.com



Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America.
Product of the Year
The Product of the Year program recognizes products newly released in the manufacturing industries.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
October 2018
Tools vs. sensors, functional safety, compressor rental, an operational network of maintenance and safety
September 2018
2018 Engineering Leaders under 40, Women in Engineering, Six ways to reduce waste in manufacturing, and Four robot implementation challenges.
July/Aug
GAMS preview, 2018 Mid-Year Report, EAM and Safety
October 2018
2018 Product of the Year; Subsurface data methodologies; Digital twins; Well lifecycle data
August 2018
SCADA standardization, capital expenditures, data-driven drilling and execution
June 2018
Machine learning, produced water benefits, programming cavity pumps
Spring 2018
Burners for heat-treating furnaces, CHP, dryers, gas humidification, and more
October 2018
Complex upgrades for system integrators; Process control safety and compliance
September 2018
Effective process analytics; Four reasons why LTE networks are not IIoT ready

Annual Salary Survey

After two years of economic concerns, manufacturing leaders once again have homed in on the single biggest issue facing their operations:

It's the workers—or more specifically, the lack of workers.

The 2017 Plant Engineering Salary Survey looks at not just what plant managers make, but what they think. As they look across their plants today, plant managers say they don’t have the operational depth to take on the new technologies and new challenges of global manufacturing.

Read more: 2017 Salary Survey

The Maintenance and Reliability Coach's blog
Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
One Voice for Manufacturing
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Maintenance and Reliability Professionals Blog
The Society for Maintenance and Reliability Professionals an organization devoted...
Machine Safety
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
Research Analyst Blog
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Marshall on Maintenance
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
Lachance on CMMS
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
Material Handling
This digital report explains how everything from conveyors and robots to automatic picking systems and digital orders have evolved to keep pace with the speed of change in the supply chain.
Electrical Safety Update
This digital report explains how plant engineers need to take greater care when it comes to electrical safety incidents on the plant floor.
IIoT: Machines, Equipment, & Asset Management
Articles in this digital report highlight technologies that enable Industrial Internet of Things, IIoT-related products and strategies.
Randy Steele
Maintenance Manager; California Oils Corp.
Matthew J. Woo, PE, RCDD, LEED AP BD+C
Associate, Electrical Engineering; Wood Harbinger
Randy Oliver
Control Systems Engineer; Robert Bosch Corp.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
Design of Safe and Reliable Hydraulic Systems for Subsea Applications
This eGuide explains how the operation of hydraulic systems for subsea applications requires the user to consider additional aspects because of the unique conditions that apply to the setting
click me