PMI® at 51.5%
New Orders and Production Growing
Employment and Inventories Contracting
Supplier Deliveries Slowing
(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in September following one month of contraction in August, and the overall economy grew for the 88th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. “The September PMI® registered 51.5 percent, an increase of 2.1 percentage points from the August reading of 49.4 percent. The New Orders Index registered 55.1 percent, an increase of 6 percentage points from the August reading of 49.1 percent.
The Production Index registered 52.8 percent, 3.2 percentage points higher than the August reading of 49.6 percent. The Employment Index registered 49.7 percent, an increase of 1.4 percentage points from the August reading of 48.3 percent. Inventories of raw materials registered 49.5 percent, an increase of 0.5 percentage point from the August reading of 49 percent.
The Prices Index registered 53 percent in September, the same reading as in August, indicating higher raw materials prices for the seventh consecutive month. Manufacturing expanded in September following one month of contraction in August, with nine of the 18 industries reporting an increase in new orders in September (up from six in August), and 10 of the 18 industries reporting an increase in production in September (up from eight in August).”
Of the 18 manufacturing industries, seven are reporting growth in September in the following order: Nonmetallic Mineral Products; Furniture & Related Products; Textile Mills; Food, Beverage & Tobacco Products; Computer & Electronic Products; Miscellaneous Manufacturing; and Paper Products.
The 11 industries reporting contraction in September — listed in order — are: Printing & Related Support Activities; Petroleum & Coal Products; Wood Products; Apparel, Leather & Allied Products; Transportation Equipment; Machinery; Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Chemical Products; and Electrical Equipment, Appliances & Components.
WHAT RESPONDENTS ARE SAYING …
- “Domestic and international sales moving up slightly.” (Chemical Products)
- “Negotiating prices down on all metals.” (Computer & Electronic Products)
- “Business is still strong, but we are seeing some pushouts from certain consumer market products.” (Primary Metals)
- “Sales on the increase and positive outlook for the remainder of 2016.” (Fabricated Metal Products)
- “Good growing conditions for this year’s corn and soybean crop has the protein market anticipating large supplies and lower cost of goods for 2017.” (Food, Beverage & Tobacco Products)
- “General business conditions are slowly improving with increased sales and sales leads.” (Machinery)
- “Furniture sales are increasing.” (Furniture & Related Products)
- “Some concern about fallout from the Hanjin Shipping bankruptcy. Spending time tracking containers — alternatives. Also, predicated on the impact to worldwide rates, there is some concern around both capacity and ocean rates in the near — to midterm future.” (Transportation Equipment)
- “Demand increase after previous lackluster month. Some pre-buying activity underway by customers in advance of expected price increases.” (Plastics & Rubber Products)
- “Oil prices have increased with respect to the first quarter but they remain at low levels affecting our revenue and purchasing power.” (Petroleum & Coal Products)
| MANUFACTURING AT A GLANCE September 2016 | ||||||
|---|---|---|---|---|---|---|
Index | Series Index Sep | Series Index Aug | Percentage Point Change | Direction | Rate of Change |
Trend* (Months) |
| PMI® | 51.5 | 49.4 | +2.1 | Growing | From Contracting | 1 |
| New Orders | 55.1 | 49.1 | +6.0 | Growing | From Contracting | 1 |
| Production | 52.8 | 49.6 | +3.2 | Growing | From Contracting | 1 |
| Employment | 49.7 | 48.3 | +1.4 | Contracting | Slower | 3 |
| Supplier Deliveries | 50.3 | 50.9 | -0.6 | Slowing | Slower | 5 |
| Inventories | 49.5 | 49.0 | +0.5 | Contracting | Slower | 15 |
| Customers’ Inventories | 53.0 | 49.5 | +3.5 | Too High | From Too Low | 1 |
| Prices | 53.0 | 53.0 | 0.0 | Increasing | Same | 7 |
| Backlog of Orders | 49.5 | 45.5 | +4.0 | Contracting | Slower | 3 |
| New Export Orders | 52.0 | 52.5 | -0.5 | Growing | Slower | 7 |
| Imports | 49.0 | 47.0 | +2.0 | Contracting | Slower | 2 |
| OVERALL ECONOMY | Growing | Faster | 88 | |||
| Manufacturing Sector | Growing | From Contracting | 1 | |||
Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production,
