Fra ISM – analytikernes forventning var en score på 45, det blev 49, men “nye ordrer” styrtdykkede til 42 med 50 som neutral værdi
PMI® at 49.1%
Production, New Orders, and Employment Contracting
Supplier Deliveries Slowing at Faster Rate; Backlog Contracting
Raw Materials Inventories Contracting; Customers’ Inventories Too Low
Prices Decreasing; Exports and Imports Contracting
(Tempe, Arizona) — Economic activity in the manufacturing sector contracted in March, and the overall economy grew for the 131st consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: “The March PMI® registered 49.1 percent, down 1 percentage point from the February reading of 50.1 percent. The New Orders Index registered 42.2 percent, a decrease of 7.6 percentage points from the February reading of 49.8 percent. The Production Index registered 47.7 percent, down 2.6 percentage points compared to the February reading of 50.3 percent. The Backlog of Orders Index registered 45.9 percent, a decrease of 4.4 percentage points compared to the February reading of 50.3 percent. The Employment Index registered 43.8 percent, a decrease of 3.1 percentage points from the February reading of 46.9 percent.
“The Supplier Deliveries Index registered 65 percent, up 7.7 percentage points from the February reading of 57.3 percent, and limited the decrease in the composite PMI®. The Supplier Deliveries Index is one of five equally weighted subindexes that directly factor into the PMI®, along with New Orders, Production, Employment and Inventories. Supplier Deliveries is the only ISM® Report On Business® index that is inversed — a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases. However, the high index reading in March was primarily a product of coronavirus-related supply problems.
“The Inventories Index registered 46.9 percent, 0.4 percentage point higher than the February reading of 46.5 percent. The Prices Index registered 37.4 percent, down 8.5 percentage points compared to the February reading of 45.9 percent. The New Export Orders Index registered 46.6 percent, a decrease of 4.6 percentage points compared to the February reading of 51.2 percent. The Imports Index registered 42.1 percent, a 0.5-percentage point decrease from the February reading of 42.6 percent.
“Comments from the panel were negative regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and energy market volatility. The PMI® returned to contraction territory, and with a negative trajectory. Demand slumped, with (1) the New Orders Index contracting at a strong level, in part pushed by new export order contraction, (2) the Customers’ Inventories Index remaining at ‘too low’ status, but increasing at a level considered a negative for future production, (3) the Backlog of Orders Index contracting again, at a moderate rate. Consumption (measured by the Production and Employment indexes) contributed negatively (a combined 5.7-percentage point decrease) to the PMI® calculation, with activity contracting at a faster rate. Inputs — expressed as supplier deliveries, inventories and imports — strengthened in March, due primarily to supplier delivery difficulties; inventory contraction stabilized. Despite imports contracting at strong rates due primarily to coronavirus impacts, inputs contributed positively to the PMI® calculation (the Imports Index does not directly factor into the PMI®). Prices continued to contract (and at a faster rate in March), supporting a negative outlook.
“The coronavirus pandemic and shocks in global energy markets have impacted all manufacturing sectors. Among the six big industry sectors, Food, Beverage & Tobacco Products remains strongest, followed by Chemical Products, which in addition to the pharmaceutical component, is a significant contributor to the Food, Beverage & Tobacco Products Industry and beneficiary of low energy and feedstock prices. Transportation Equipment and Petroleum & Coal Products are the weakest sectors. Sentiment regarding near-term growth this month is strongly negative, by a 2-to-1 ratio,” says Fiore.
Of the 18 manufacturing industries, the 10 that reported growth in March — listed in order — are: Printing & Related Support Activities; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Wood Products; Paper Products; Chemical Products; Computer & Electronic Products; Primary Metals; Miscellaneous Manufacturing; and Plastics & Rubber Products. The six industries reporting contraction in March, in order, are: Petroleum & Coal Products; Textile Mills; Transportation Equipment; Furniture & Related Products; Fabricated Metal Products; and Machinery.
WHAT RESPONDENTS ARE SAYING
- “COVID-19 is impacting China’s raw material supply chain. We are now seeing revenue impact in that region. Our operations team is reviewing plans for spread of the virus.” (Computer & Electronic Products)
- “The two main issues affecting our business [are] COVID-19 and the oil-price war. We are in daily discussions and meeting constantly, updating tracking logs to document high risk concerns.” (Chemical Products)
- “COVID-19 impact has extended to Europe and North America. The virus escalation is affecting our purchasing and logistics operations. We have incurred air-shipment and production interruptions due to shortages of raw materials and components.” (Transportation Equipment)
- “We are experiencing a record number of orders due to COVID-19.” (Food, Beverage & Tobacco Products)
- “World demand for petroleum products is declining, while supply is ramping up. We have lost supply chain visibility to certain locations.” (Petroleum & Coal Products)
- “COVID-19’s spread in the U.S. may start impacting our domestic business. As for Asian suppliers, they are starting to get back up to speed.” (Fabricated Metal Products)
- “COVID-19 has caused a 30-percent reduction in productivity in our factory.” (Machinery)
- “A big part of our business is hospitality, and we are seeing demand drop and an increase in cancellations.” (Nonmetallic Mineral Products)
- “All North American manufacturing plants have ceased operations or drastically scaled back as a result of customer plant closings and other responses to COVID-19.” (Plastics & Rubber Products)
- “Volumes are down 4.3 percent, and some areas of the supply chain are being affected by the coronavirus.” (Furniture & Related Products)
MANUFACTURING AT A GLANCE
MARCH 2020
| Index | Series Index Mar | Series Index Feb | Percentage Point Change | Direction | Rate of Change | Trend* (Months) |
|---|---|---|---|---|---|---|
| PMI® | 49.1 | 50.1 | -1.0 | Contracting | From Growing | 1 |
| New Orders | 42.2 | 49.8 | -7.6 | Contracting | Faster | 2 |
| Production | 47.7 | 50.3 | -2.6 | Contracting | From Growing | 1 |
| Employment | 43.8 | 46.9 | -3.1 | Contracting | Faster | 8 |
| Supplier Deliveries | 65.0 | 57.3 | +7.7 | Slowing | Faster | 5 |
| Inventories | 46.9 | 46.5 | +0.4 | Contracting | Slower | 10 |
| Customers’ Inventories | 43.4 | 41.8 | +1.6 | Too Low | Slower | 42 |
| Prices | 37.4 | 45.9 | -8.5 | Decreasing | Faster | 2 |
| Backlog of Orders | 45.9 | 50.3 | -4.4 | Contracting | From Growing | 1 |
| New Export Orders | 46.6 | 51.2 | -4.6 | Contracting | From Growing | 1 |
| Imports | 42.1 | 42.6 | -0.5 | Contracting | Faster | 2 |
| OVERALL ECONOMY | Growing | Slower | 131 | |||
| Manufacturing Sector | Contracting | From Growing | 1 | |||
Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.
COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY
Commodities Up in Price
Capacitors (2); Circuit Card Assemblies; Isopropyl Alcohol; Personal Protective Equipment (PPE) — Gloves; Resistors (2); Steel — Hot Rolled* (5); and Steel Products (2).
Commodities Down in Price
Aluminum (2); Aluminum Products (3); Base Oils; Copper (2); Corrugate (2); Crude Oil (2); Diesel Fuel; Fuel; Heating Oil; Natural Gas (4); Oil Products; Plastic; Scrap (2); and Steel — Hot Rolled* (2).
Commodities in Short Supply
Cleaning Wipes; Hand Sanitizer; Isopropyl Alcohol; Paper Towels; Personal Protective Equipment (PPE) — Gloves; PPE — Masks; and Toilet Paper.
Note: The number of consecutive months the commodity is listed is indicated after each item. *Indicates both up and down in price.
MARCH 2020 MANUFACTURING INDEX SUMMARIES
PMI®
Manufacturing contracted in March, as the PMI® registered 49.1 percent, a 1-percentage point decrease from the February reading of 50.1 percent. “The PMI® contracted in March after expanding marginally in January and February. Three of the big six industries expanded, with Food, Beverage & Tobacco Products expanding strongly. Only one (Supplier Deliveries) of the PMI®’s 10 subindexes recorded expansion, down from four the previous month,” 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® above 42.8 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the March PMI® indicates growth for the 131st consecutive month in the overall economy, but a return to contraction by the manufacturing sector following two months of expansion. “The past relationship between the PMI® and the overall economy indicates that the PMI® for March (49.1 percent) corresponds to a 1.8-percent increase in real gross domestic product (GDP) on an annualized basis,” says Fiore.
