Press Release: PMI(R) at 59.7%; December -3-

01/03/18 10:15 AM EST

ISM(R) 's New Export Orders Index registered 58.5 percent in December, an increase of 2.5 percentage points when compared to the 56 percent reported for November, indicating growth in new export orders for the 22nd consecutive month. "Five of the six big industry sectors, accounting for 63 percent of manufacturing GDP, continued to expand export activity during the period," says Fiore.

The 10 industries reporting growth in new export orders in December -- listed in order -- are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Computer & Electronic Products; Machinery; Miscellaneous Manufacturing; Plastics & Rubber Products; Chemical Products; Transportation Equipment; Fabricated Metal Products; and Food, Beverage & Tobacco Products. The only industry reporting a decrease in new export orders in December compared to November is Primary Metals. Six industries reported no change in new export orders in December compared to November.

New Export   % 
 Orders       Reporting  %Higher  %Same  %Lower  Net  Index 
Dec 2017     78          20       77     3       +17  58.5 
Nov 2017     80          14       84     2       +12  56.0 
Oct 2017     77          17       79     4       +13  56.5 
Sep 2017     78          18       78     4       +14  57.0 


ISM(R) 's Imports Index registered 57.5 percent in December, an increase of 3.0 percentage points when compared to the 54.5 percent reported for November, indicating that imports grew in December for the 11th consecutive month. "Imports expanded at significantly greater rates during the period to keep pace with production output," says Fiore.

The 13 industries reporting growth in imports during the month of December -- listed in order -- are: Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Fabricated Metal Products; Petroleum & Coal Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Food, Beverage & Tobacco Products; Chemical Products; and Paper Products. The only industry that reported a decrease in imports during December compared to November is Primary Metals.

Imports     Reporting  %Higher  %Same  %Lower  Net  Index 
Dec 2017   83          20       75     5       +15  57.5 
Nov 2017   82          14       81     5       +9   54.5 
Oct 2017   80          16       76     8       +8   54.0 
Sep 2017   83          14       80     6       +8   54.0 

*The Inventories, Customers' Inventories, Prices, Backlog of Orders, New Export Orders and Imports Indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy

Average commitment lead time for Capital Expenditures decreased in December to 139 days from 140 days. Average lead time for Production Materials remained the same at 59 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies decreased by 1 day to 36 days.

Percent Reporting 
Capital         Hand-to-  30     60     90     6                 Average 
 Expenditures    Mouth     Days   Days   Days   Months  1 Year+   Days 
Dec 2017        19        9      11     17     25       19       139 
Nov 2017        19        7      10     18     28       18       140 
Oct 2017        20        5      13     18     22       22       145 
Sep 2017        20        8      11     15     26       20       142 
Production      Hand-to-  30     60     90     6                 Average 
 Materials       Mouth     Days   Days   Days   Months  1 Year+   Days 
Dec 2017        12        38     25     19     4        2        59 
Nov 2017        11        37     26     19     6        1        59 
Oct 2017        13        36     26     17     6        2        60 
Sep 2017        11        34     29     18     6        2        62 
                Hand-to-  30     60     90     6                 Average 
MRO Supplies     Mouth     Days   Days   Days   Months  1 Year+   Days 
Dec 2017        33        41     15     8      3        0        36 
Nov 2017        32        38     19     8      3        0        37 
Oct 2017        34        40     19     5      2        0        33 
Sep 2017        33        39     19     7      2        0        35 

About This Report

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of December 2017.

The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM(R) makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation

The Manufacturing ISM(R) Report On Business(R) is based on data compiled from purchasing and supply executives nationwide. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (PMI(R) , New Orders, Production, Employment and Supplier Deliveries) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The PMI(R) is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), and Inventories.

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI(R) reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI(R) above 43.3 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.3 percent, it is generally declining. The distance from 50 percent or 43.3 percent is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM(R) has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM(R) Report On Business(R) survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM(R) receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM(R) then compiles the report for release on the first business day of the following month.

The industries reporting growth, as indicated in the Manufacturing ISM(R) Report On Business(R) monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern.

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January 03, 2018 10:15 ET (15:15 GMT)

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