August 2010 Manufacturing ISM Report On Businessฎ
PMI at 56.3%
New Orders, Production and Employment Growing
Supplier
Deliveries Slower
Inventories Growing
Economic activity in the manufacturing sector expanded in
August for the 13th consecutive month, and the overall
economy grew for the 16th consecutive month, say the
nation's supply executives in the latest Manufacturing ISM
Report On Business.
The report was issued on September 1st by Norbert J. Ore,
CPSM, C.P.M., chair of the Institute for Supply Management
Manufacturing Business Survey Committee. "Manufacturing
activity continued at a very positive rate in August as the
PMI rose slightly when compared to July. In terms of
month-over-month improvement, the Production and Employment
Indexes experienced the greatest gains, while new orders
continued to grow but at a slightly slower rate. August
represents the 13th consecutive month of growth in
U.S.
manufacturing."
PERFORMANCE BY INDUSTRY
Eleven of the 18 manufacturing industries are reporting
growth in August, in the following order: Primary Metals;
Apparel, Leather & Allied Products; Transportation
Equipment; Fabricated Metal Products; Electrical Equipment,
Appliances & Components; Miscellaneous Manufacturing;
Computer & Electronic Products; Paper Products; Chemical
Products; Food, Beverage & Tobacco Products; and Printing &
Related Support Activities. The five industries reporting
contraction in August are: Furniture & Related Products;
Petroleum & Coal Products; Nonmetallic Mineral Products;
Plastics & Rubber Products; and Machinery.
WHAT RESPONDENTS ARE SAYING...
-
"Still experiencing intermittent delays in electronic
components due to capacity and raw materials."
(Electrical Equipment, Appliances & Components)
-
"International sales are especially strong.
Domestic business is solid."
(Chemical Products)
-
"Orders and business still strong." (Primary Metals)
-
"Order rate has slowed some. Supplier capacity in
general seems to be
improved." (Machinery)
-
"Large customers reducing pull rates for
production." (Computer &
Electronic Products)
|
MANUFACTURING AT A GLANCE
AUGUST 2010
|
|
Index
|
Series
Index
August
|
Series
Index
July
|
Percentage
Point
Change
|
Direction
|
Rate
of
Change
|
Trend*
(Months)
|
|
PMI
|
56.3
|
55.5
|
+0.8
|
Growing
|
Faster
|
13
|
|
New Orders
|
53.1
|
53.5
|
-0.4
|
Growing
|
Slower
|
14
|
|
Production
|
59.9
|
57.0
|
+2.9
|
Growing
|
Faster
|
15
|
|
Employment
|
60.4
|
58.6
|
+1.8
|
Growing
|
Faster
|
9
|
|
Supplier Deliveries
|
56.6
|
58.3
|
-1.7
|
Slowing
|
Slower
|
15
|
|
Inventories
|
51.4
|
50.2
|
+1.2
|
Growing
|
Faster
|
2
|
|
Customers' Inventories
|
43.5
|
39.0
|
+4.5
|
Too Low
|
Slower
|
17
|
|
Prices
|
61.5
|
57.5
|
+4.0
|
Increasing
|
Faster
|
14
|
|
Backlog of Orders
|
51.5
|
54.5
|
-3.0
|
Growing
|
Slower
|
8
|
|
Exports
|
55.5
|
56.5
|
-1.0
|
Growing
|
Slower
|
14
|
|
Imports
|
56.5
|
52.5
|
+4.0
|
Growing
|
Faster
|
12
|
|
|
|
|
|
|
|
|
|
OVERALL ECONOMY
|
Growing
|
Faster
|
16
|
|
Manufacturing Sector
|
Growing
|
Faster
|
13
|
*Number of months
moving in current direction.
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT
SUPPLY
Commodities Up in Price
Caustic Soda; Copper; and Corrugated Containers (6).
Commodities Down in Price
Polyethylene (2); Polypropylene; and Steel (2).
Commodities in Short Supply
Capacitors (2) is the only commodity listed in short supply.
Note: The number of consecutive months the commodity is
listed is indicated after each item.
August
2010 MANUFACTURING INDEX SUMMARIES
PMI
Manufacturing continued to grow in August as the PMI
registered 56.3 percent, an increase of 0.8 percentage point
when compared to July's reading of 55.5 percent. A reading
above 50 percent indicates that the manufacturing economy is
generally expanding; below 50 percent indicates that it is
generally contracting.
A PMI in excess of 42 percent, over a period of time,
generally indicates an expansion of the overall economy.
Therefore, the PMI indicates growth for the 16th consecutive
month in the overall economy, as well as expansion in the
manufacturing sector for the 13th consecutive month. Ore
stated, "The past relationship between the PMI and the
overall economy indicates that the average PMI for January
through August (57.8 percent) corresponds to a 5.3 percent
increase in real gross domestic product (GDP). In addition,
if the PMI for August (56.3 percent) is annualized, it
corresponds to a 4.8 percent increase in real
GDP
annually."
THE LAST 12 MONTHS
|
Month
|
PMI
|
|
Month
|
PMI
|
|
Aug 2010
|
56.3
|
|
Feb 2010
|
56.5
|
|
Jul 2010
|
55.5
|
|
Jan 2010
|
58.4
|
|
Jun 2010
|
56.2
|
|
Dec 2009
|
54.9
|
|
May 2010
|
59.7
|
|
Nov 2009
|
53.7
|
|
Apr 2010
|
60.4
|
|
Oct 2009
|
55.2
|
|
Mar 2010
|
59.6
|
|
Sep 2009
|
52.4
|
|
Average for 12 months 56.6
High 60.4
Low 52.4
|
New Orders
ISM's New Orders Index
registered 53.1 percent in August, which is a decrease of
0.4 percentage point when compared to the 53.5 percent
reported in July. This is the 14th consecutive month of
growth in the New Orders Index. A New Orders Index above
50.2 percent, over time, is generally consistent with an
increase in the Census Bureau's series on manufacturing
orders (in constant 2000 dollars).
The eight industries
reporting growth in new orders in August listed in order
are: Primary Metals; Apparel, Leather & Allied Products;
Paper Products; Fabricated Metal Products; Electrical
Equipment, Appliances & Components; Miscellaneous
Manufacturing; Transportation Equipment; and Chemical
Products. The six industries reporting decreases in new
orders in August listed in order are: Nonmetallic
Mineral Products; Furniture & Related Products; Plastics &
Rubber Products; Computer & Electronic Products; Machinery;
and Food, Beverage & Tobacco Products.
|
New
Orders
|
%
Better
|
%
Same
|
%
Worse
|
Net
|
Index
|
|
Aug 2010
|
29
|
49
|
22
|
+7
|
53.1
|
|
Jul 2010
|
27
|
53
|
20
|
+7
|
53.5
|
|
Jun 2010
|
36
|
50
|
14
|
+22
|
58.5
|
|
May 2010
|
50
|
38
|
12
|
+38
|
65.7
|
Production
ISM's Production Index registered 59.9 percent in August,
which is an increase of 2.9 percentage points from the July
reading of 57 percent. An index above 51 percent, over time,
is generally consistent with an increase in the Federal
Reserve Board's Industrial Production figures. This is the
15th consecutive month the Production Index has registered
above 50 percent.
The 11 industries reporting growth in production during the
month of August listed in order are: Apparel, Leather &
Allied Products; Primary Metals; Electrical Equipment,
Appliances & Components; Miscellaneous Manufacturing; Paper
Products; Transportation Equipment; Fabricated Metal
Products; Machinery; Food, Beverage & Tobacco Products;
Computer & Electronic Products; and Chemical Products. The
four industries reporting a decrease in production in August
are: Petroleum & Coal Products; Nonmetallic Mineral
Products; Furniture & Related Products; and Printing &
Related Support Activities.
|
Production
|
%
Better
|
%
Same
|
%
Worse
|
Net
|
Index
|
|
Aug 2010
|
33
|
53
|
14
|
+19
|
59.9
|
|
Jul 2010
|
31
|
50
|
19
|
+12
|
57.0
|
|
Jun 2010
|
40
|
47
|
13
|
+27
|
61.4
|
|
May 2010
|
51
|
37
|
12
|
+39
|
66.6
|
Employment
ISM's Employment Index registered 60.4
percent in August, which is 1.8 percentage points higher
than the 58.6 percent reported in July. This is the ninth
consecutive month of growth in manufacturing employment. An
Employment Index above 49.8 percent, over time, is generally
consistent with an increase in the Bureau of Labor
Statistics (BLS) data on manufacturing employment.
Ten of the 18 manufacturing industries reported growth in
employment in August in the following order: Transportation
Equipment; Paper Products; Printing & Related Support
Activities; Primary Metals; Computer & Electronic Products;
Fabricated Metal Products; Electrical Equipment, Appliances
& Components; Miscellaneous Manufacturing; Food, Beverage &
Tobacco Products; and Chemical Products. Furniture & Related
Products is
the only industry reporting a decrease in
employment during August.
|
Employment
|
%
Higher
|
%
Same
|
%
Lower
|
Net
|
Index
|
|
Aug 2010
|
26
|
69
|
5
|
+21
|
60.4
|
|
Jul 2010
|
26
|
66
|
8
|
+18
|
58.6
|
|
Jun 2010
|
26
|
63
|
11
|
+15
|
57.8
|
|
May 2010
|
28
|
66
|
6
|
+22
|
59.8
|
Supplier Deliveries
The delivery performance of suppliers
to manufacturing organizations was slower in August as the
Supplier Deliveries Index registered 56.6 percent, which is
1.7 percentage points lower than the 58.3 percent registered
in July. This is the 15th consecutive month the Supplier
Deliveries Index has been above 50 percent. A reading above
50 percent indicates slower deliveries.
The 10 industries reporting slower supplier deliveries in
August listed in order are: Transportation Equipment;
Computer & Electronic Products; Plastics & Rubber Products;
Primary Metals; Electrical Equipment, Appliances &
Components; Chemical Products; Miscellaneous Manufacturing;
Fabricated Metal Products; Machinery; and Food, Beverage &
Tobacco Products. There were no industry reports of faster
deliveries in August.
|
Supplier
Deliveries
|
%
Slower
|
%
Same
|
%
Faster
|
Net
|
Index
|
|
Aug 2010
|
19
|
78
|
3
|
+16
|
56.6
|
|
Jul 2010
|
28
|
66
|
6
|
+22
|
58.3
|
|
Jun 2010
|
23
|
71
|
6
|
+17
|
57.3
|
|
May 2010
|
29
|
66
|
5
|
+24
|
61.0
|
Inventories
Manufacturers' inventories grew
in August as the Inventories Index registered 51.4 percent.
The index is 1.2 percentage points higher than the 50.2
percent reported in July. An Inventories Index greater than
42.6 percent, over time, is generally consistent with
expansion in the Bureau of Economic Analysis' (BEA) figures
on overall manufacturing inventories (in chained 2000
dollars).
The eight industries
reporting higher inventories in August listed in order
are: Apparel, Leather & Allied Products; Printing & Related
Support Activities; Nonmetallic Mineral Products; Primary
Metals; Fabricated Metal Products; Computer & Electronic
Products; Transportation Equipment; and Chemical Products.
The six industries reporting decreases in inventories in
August listed in order are: Furniture & Related
Products; Plastics & Rubber Products; Paper Products;
Machinery; Electrical Equipment, Appliances & Components;
and Food, Beverage & Tobacco Products.
|
Inventories
|
%
Higher
|
%
Same
|
%
Lower
|
Net
|
Index
|
|
Aug 2010
|
19
|
68
|
13
|
+6
|
51.4
|
|
Jul 2010
|
19
|
60
|
21
|
-2
|
50.2
|
|
Jun 2010
|
13
|
66
|
21
|
-8
|
45.8
|
|
May 2010
|
13
|
66
|
21
|
-8
|
45.6
|
Customers' Inventories*
The ISM Customers'
Inventories Index registered 43.5 percent in August, 4.5
percentage points higher than in July when the index
registered 39 percent. This is the 17th consecutive month
the Customers' Inventories Index has been below 50 percent,
indicating that respondents believe their customers'
inventories are too low at this time.
Miscellaneous Manufacturing is the only manufacturing
industry reporting customers' inventories as being too high
during August. The eight industries reporting customers'
inventories as too low during August listed in order
are: Nonmetallic Mineral Products; Printing & Related
Support Activities; Primary Metals; Electrical Equipment,
Appliances & Components; Computer & Electronic Products;
Chemical Products; Machinery; and Fabricated Metal Products.
|
Customers'
Inventories
|
%
Reporting
|
%Too
High
|
%About
Right
|
%Too
Low
|
Net
|
Index
|
|
Aug 2010
|
65
|
11
|
65
|
24
|
-13
|
43.5
|
|
Jul 2010
|
81
|
6
|
66
|
28
|
-22
|
39.0
|
|
Jun 2010
|
67
|
4
|
68
|
28
|
-24
|
38.0
|
|
May 2010
|
69
|
5
|
54
|
41
|
-36
|
32.0
|
Prices*
The ISM Prices Index registered 61.5
percent in August, 4 percentage points higher than the 57.5
percent reported in July. This is the 14th consecutive month
the Prices Index has registered above 50 percent. While 35
percent of respondents reported paying higher prices and 12
percent reported paying lower prices, 53 percent of supply
executives reported paying the same prices as in July. A
Prices Index above 49.3 percent, over time, is generally
consistent with an increase in the Bureau of Labor
Statistics (BLS) Index of Manufacturers Prices.
The 12 industries reporting paying
increased prices during the month of August listed in
order are: Paper Products; Primary Metals; Electrical
Equipment, Appliances & Components; Apparel, Leather &
Allied Products; Transportation Equipment; Printing &
Related Support Activities; Chemical Products; Furniture &
Related Products; Food, Beverage & Tobacco Products;
Machinery; Miscellaneous Manufacturing; and Computer &
Electronic Products. The three industries reporting paying
lower prices on average during August are: Nonmetallic
Mineral Products; Fabricated Metal Products; and Plastics &
Rubber Products.
|
Prices
|
%
Higher
|
%
Same
|
%
Lower
|
Net
|
Index
|
|
Aug 2010
|
35
|
53
|
12
|
+23
|
61.5
|
|
Jul 2010
|
33
|
49
|
18
|
+15
|
57.5
|
|
Jun 2010
|
32
|
50
|
18
|
+14
|
57.0
|
|
May 2010
|
60
|
35
|
5
|
+55
|
77.5
|
Backlog of Orders*
ISM's Backlog of Orders Index registered
51.5 percent in August, 3 percentage points lower than the
54.5 percent reported in July. Of the 84 percent of
respondents who reported their backlog of orders, 25 percent
reported greater backlogs, 22 percent reported smaller
backlogs, and 53 percent reported no change from July.
The eight industries reporting increased order backlogs in
August listed in order are: Paper Products; Primary
Metals; Computer & Electronic Products; Miscellaneous
Manufacturing; Electrical Equipment, Appliances &
Components; Transportation Equipment; Fabricated Metal
Products; and Food, Beverage & Tobacco Products. The seven
industries reporting decreases in order backlogs during
August listed in order are: Furniture & Related
Products; Nonmetallic Mineral Products; Apparel, Leather &
Allied Products; Plastics & Rubber Products; Printing &
Related Support Activities; Machinery; and Chemical
Products.
|
Backlog of
Orders
|
%
Reporting
|
%
Greater
|
%
Same
|
%
Less
|
Net
|
Index
|
|
Aug 2010
|
84
|
25
|
53
|
22
|
+3
|
51.5
|
|
Jul 2010
|
86
|
28
|
53
|
19
|
+9
|
54.5
|
|
Jun 2010
|
85
|
31
|
52
|
17
|
+14
|
57.0
|
|
May 2010
|
85
|
30
|
59
|
11
|
+19
|
59.5
|
New Export Orders*
ISM's New Export Orders Index registered
55.5 percent in August, which is 1 percentage point lower
than the 56.5 percent reported in July. This is the 14th
consecutive month of growth in the New Export Orders Index.
The 10 industries reporting growth in new export orders in
August listed in order are: Furniture & Related
Products; Primary Metals; Machinery; Transportation
Equipment; Electrical Equipment, Appliances & Components;
Fabricated Metal Products; Miscellaneous Manufacturing;
Food, Beverage & Tobacco Products; Computer & Electronic
Products; and Chemical Products. None of the 18
manufacturing industries reported a decrease in export
orders during August.
|
New Export
Orders
|
%
Reporting
|
%
Higher
|
%
Same
|
%
Lower
|
Net
|
Index
|
|
Aug 2010
|
80
|
16
|
79
|
5
|
+11
|
55.5
|
|
Jul 2010
|
78
|
20
|
73
|
7
|
+13
|
56.5
|
|
Jun 2010
|
78
|
19
|
74
|
7
|
+12
|
56.0
|
|
May 2010
|
78
|
28
|
68
|
4
|
+24
|
62.0
|
Imports*
Imports of materials by manufacturers
expanded in August as the Imports Index registered 56.5
percent, 4 percentage points higher than the 52.5 reported
in July. This is the 12th consecutive month of growth in
imports.
The nine industries reporting growth in imports during the
month of August are: Apparel, Leather & Allied Products;
Printing & Related Support Activities; Primary Metals;
Electrical Equipment, Appliances & Components; Fabricated
Metal Products; Computer & Electronic Products; Food,
Beverage & Tobacco Products; Transportation Equipment; and
Machinery. The two industries reporting a decrease in
imports during August are: Miscellaneous Manufacturing and
Chemical Products.
|
Imports
|
%
Reporting
|
%
Higher
|
%
Same
|
%
Lower
|
Net
|
Index
|
|
Aug 2010
|
80
|
18
|
77
|
5
|
+13
|
56.5
|
|
Jul 2010
|
78
|
14
|
77
|
9
|
+5
|
52.5
|
|
Jun 2010
|
77
|
20
|
73
|
7
|
+13
|
56.5
|
|
May 2010
|
82
|
17
|
79
|
4
|
+13
|
56.5
|
* The Backlog of Orders, Prices,
Customers' Inventories, Imports and New Export Orders
Indexes do not meet the accepted criteria for seasonal
adjustments.
Buying Policy
Average commitment lead time for
Capital Expenditures increased 15 days to 127 days. Average
lead time for Production Materials remained unchanged at 52
days. Average lead time for Maintenance, Repair and
Operating (MRO) Supplies decreased 2 days to 21 days.
|
Percent Reporting
|
|
Capital
Expenditures
|
Hand-
to-
Mouth
|
30
Days
|
60
Days
|
90
Days
|
6
Months
|
1
Year+
|
Average
Days
|
|
Aug 2010
|
26
|
4
|
10
|
14
|
33
|
13
|
127
|
|
Jul 2010
|
30
|
7
|
11
|
13
|
28
|
11
|
112
|
|
Jun 2010
|
28
|
8
|
9
|
16
|
29
|
10
|
112
|
|
May 2010
|
32
|
8
|
9
|
15
|
26
|
10
|
106
|
|
|
|
Production
Materials
|
Hand-
to-
Mouth
|
30
Days
|
60
Days
|
90
Days
|
6
Months
|
1
Year+
|
Average
Days
|
|
Aug 2010
|
23
|
34
|
25
|
13
|
2
|
3
|
52
|
|
Jul 2010
|
23
|
35
|
24
|
11
|
5
|
2
|
52
|
|
Jun 2010
|
25
|
36
|
22
|
11
|
4
|
2
|
50
|
|
May 2010
|
22
|
41
|
21
|
10
|
5
|
1
|
48
|
|
|
|
MRO
Supplies
|
Hand-
to-
Mouth
|
30
Days
|
60
Days
|
90
Days
|
6
Months
|
1
Year+
|
Average
Days
|
|
Aug 2010
|
54
|
35
|
8
|
3
|
0
|
0
|
21
|
|
Jul 2010
|
50
|
38
|
7
|
5
|
0
|
0
|
23
|
|
Jun 2010
|
48
|
38
|
11
|
3
|
0
|
0
|
23
|
|
May 2010
|
51
|
36
|
10
|
2
|
1
|
0
|
23
|
About this Report
The data presented herein is obtained from a survey of
manufacturing supply managers based on information they have
collected within their respective organizations. ISM makes
no representation, other than that stated within this
release, regarding the individual company data collection
procedures. Use of the data is in the public domain and
should be compared to all other economic data sources when
used in decision-making.
Global Manufacturing & Services PMI
Global manufacturing PMI eased to nine month low in August,
as sector recovery slowed further. For details, please click
HERE.