Press Release: PMI(R) at 58.2%; November Manufacturing ISM(R) Report On Business(R)
PMI(R) at 58.2%; November Manufacturing ISM(R) Report On Business(R)
TEMPE, Ariz., Dec. 1, 2017
New Orders, Production, and Employment Continue Growing; Supplier Deliveries Slowing at Slower Rate, Backlog Growing; Raw Materials Inventories Contracting, Customers' Inventories Improving; Prices Increasing at Slower Rate
TEMPE, Ariz., Dec. 1, 2017 /PRNewswire/ -- Economic activity in the manufacturing sector expanded in November, and the overall economy grew for the 102nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM(R) Report On Business(R) .
The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management(R) (ISM(R) ) Manufacturing Business Survey Committee: "The November PMI(R) registered 58.2 percent, a decrease of 0.5 percentage point from the October reading of 58.7 percent. The New Orders Index registered 64 percent, an increase of 0.6 percentage point from the October reading of 63.4 percent. The Production Index registered 63.9 percent, a 2.9 percentage point increase compared to the October reading of 61 percent. The Employment Index registered 59.7 percent, a decrease of 0.1 percentage point from the October reading of 59.8 percent. The Supplier Deliveries Index registered 56.5 percent, a 4.9 percentage point decrease from the October reading of 61.4 percent. The Inventories Index registered 47 percent, a decrease of 1 percentage point from the October reading of 48 percent. The Prices Index registered 65.5 percent in November, a 3 percentage point decrease from the October level of 68.5, indicating higher raw materials prices for the 21st consecutive month. 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. Supplier deliveries continued to slow (improving), 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."
Of the 18 manufacturing industries, 14 reported growth in November, in the following order: Paper Products; Machinery; Transportation Equipment; Computer & Electronic Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Chemical Products; Furniture & Related Products; Fabricated Metal Products; Miscellaneous Manufacturing; and Primary Metals. Two industries reported contraction during the period: Wood Products; and Petroleum & Coal Products.
WHAT RESPONDENTS ARE SAYING ...
-- "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) MANUFACTURING AT A GLANCE November 2017 Series Series Percentage Rate Index Index Point of Trend* Index Nov Oct Change Direction Change (Months) PMI(R) 58.2 58.7 -0.5 Growing Slower 15 New Orders 64.0 63.4 +0.6 Growing Faster 15 Production 63.9 61.0 +2.9 Growing Faster 15 Employment 59.7 59.8 -0.1 Growing Slower 14 Supplier Deliveries 56.5 61.4 -4.9 Slowing Slower 19 Inventories 47.0 48.0 -1.0 Contracting Faster 2 Customers' Inventories 45.5 43.5 +2.0 Too Low Slower 5 Prices 65.5 68.5 -3.0 Increasing Slower 21 Backlog of Orders 55.0 55.0 0.0 Growing Same 10 New Export Orders 56.0 56.5 -0.5 Growing Slower 21 Imports 54.5 54.0 +0.5 Growing Faster 10 OVERALL ECONOMY Manufacturing Sector Growing Slower 102 Growing Slower 15
Manufacturing ISM(R) Report On Business(R) data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.
*Number of months moving in current direction.
COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY
Commodities Up in Price
Aluminum (13); Caustic Soda (5); Copper; Corrugate (14); Nickel Based Metals; Pallets; Plastic Resins (4); Polycarbonate; Polyethylene (3); Polypropylene (3); Resin Based Products; Silicone; Soybean Oil; Steel -- Hot Rolled (12); Steel Tubing; Titanium Dioxide (2); and Zinc Oxide.
Commodities Down in Price
Commodities in Short Supply
Capacitors (5); Resistors; and Titanium Dioxide.
Note: The number of consecutive months the commodity is listed is indicated after each item.
NOVEMBER 2017 MANUFACTURING INDEX SUMMARIES
PMI(R) Manufacturing expanded in November as the PMI(R) registered 58.2 percent, a decrease of 0.5 percentage point from the October reading of 58.7 percent. "This indicates growth in manufacturing for the 15th consecutive month led by expansion in New Orders and Production, offset by Supplier Delivery improvement and declines in raw material Inventory, " says Fiore. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI(R) above 43.3 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the November PMI(R) indicates growth for the 102nd consecutive month in the overall economy and the 15th straight month of growth in the manufacturing sector. Fiore says, "The past relationship between the PMI(R) and the overall economy indicates that the average PMI(R) for January through November (57.4 percent) corresponds to a 4.5 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI(R) for November (58.2 percent) is annualized, it corresponds to a 4.7 percent increase in real GDP annually."
THE LAST 12 MONTHS
Month PMI(R) Month PMI(R) Nov 2017 58.2 May 2017 54.9 Oct 2017 58.7 Apr 2017 54.8 Sep 2017 60.8 Mar 2017 57.2 Aug 2017 58.8 Feb 2017 57.7 Jul 2017 56.3 Jan 2017 56.0 Jun 2017 57.8 Dec 2016 54.5 Average for 2017 -- 57.4 Average for 12 months -- 57.1 High -- 60.8 Low -- 54.5
ISM(R) 's New Orders Index registered 64 percent in November, which is an increase of 0.6 percentage point when compared to the 63.4 percent reported for October, indicating growth in new orders for the 15th consecutive month. "New Order expansion continues at a strong pace with the index at six straight months of levels above 60 percent," says Fiore. A New Orders Index above 52.3 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).
Fourteen of 18 industries reported growth in new orders in November, listed in the following order: Electrical Equipment, Appliances & Components; Paper Products; Furniture & Related Products; Plastics & Rubber Products; Machinery; Primary Metals; Printing & Related Support Activities; Computer & Electronic Products; Transportation Equipment; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Chemical Products; Miscellaneous Manufacturing; and Fabricated Metal Products. Two industries -- Wood Products; and Textile Mills -- reported a decrease in new orders in November compared to October.
New Orders %Better %Same %Worse Net Index Nov 2017 31 60 9 +22 64.0 Oct 2017 35 52 13 +22 63.4 Sep 2017 35 56 9 +26 64.6 Aug 2017 33 52 15 +18 60.3
ISM(R) 's Production Index registered 63.9 percent in November, which is an increase of 2.9 percentage points when compared to the 61 percent reported for October, indicating growth in production for the 15th consecutive month. This is the highest reading since March 2011, when the index registered 64.2 percent. "Production expansion continues at levels that kept pace with new orders, consumed raw material inventory and positively impacted customer inventory," says Fiore. An index above 51.4 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.
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December 01, 2017 10:15 ET (15:15 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.