PMI® at 50.1%
New Orders and Production Growing
Supplier Deliveries Slowing
Employment and Inventories Contracting
(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in October for the 34th consecutive month, and the overall economy grew for the 77th 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 October PMI® registered 50.1 percent, a decrease of 0.1 percentage point from the September reading of 50.2 percent. The New Orders Index registered 52.9 percent, an increase of 2.8 percentage points from the reading of 50.1 percent in September. The Production Index registered 52.9 percent, 1.1 percentage points above the September reading of 51.8 percent. The Employment Index registered 47.6 percent, 2.9 percentage points below the September reading of 50.5 percent. Backlog of Orders registered 42.5 percent, an increase of 1 percentage point from the September reading of 41.5 percent. The Prices Index registered 39 percent, an increase of 1 percentage point from the September reading of 38 percent, indicating lower raw materials prices for the 12th consecutive month. The New Export Orders Index registered 47.5 percent, up 1 percentage point from September, and the Imports Index registered 47 percent, down 3.5 percentage points from the September reading of 50.5 percent. Comments from the panel reflect concern over the high price of the dollar and the continuing low price of oil, mixed with cautious optimism about steady to increasing demand in several industries.”
Of the 18 manufacturing industries, seven are reporting growth in October in the following order: Printing & Related Support Activities; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Paper Products; and Fabricated Metal Products. The nine industries reporting contraction in October — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Petroleum & Coal Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; Transportation Equipment; Wood Products; and Computer & Electronic Products.
WHAT RESPONDENTS ARE SAYING …
- “Demand remains steady with three percent top line unit growth. [Dollar] ($) sales are flat due to currency and cost changes.” (Paper Products)
- “Currency exchange is having a large impact on business results.” (Chemical Products)
- “Energy market continues to struggle. Effects are beginning to bleed into other areas.” (Computer & Electronic Products)
- “Business is improving. We still need young machinists to replace those retiring.” (Fabricated Metal Products)
- “Business is picking-up in general.” (Transportation Equipment)
- “Some level of slowing, but activity is acceptable.” (Machinery)
- “Customer backlogs are increasing now that the perception[s] of raw material[s] pricing have bottomed out.” (Plastics & Rubber Products)
- “Sales demand becoming more consistent. Beginning to see slightly more capital spending by key customers. Outlook more positive than negative.” (Electrical Equipment, Appliances & Components)
- “Wood products market is sluggish with prices varying up/down depending on size and grade.” (Wood Products)
- “So far bird flu has not been reintroduced as bird migration begins.” (Food, Beverage & Tobacco Products)
| MANUFACTURING AT A GLANCE OCTOBER 2015 | ||||||
|---|---|---|---|---|---|---|
| Index | Series Index Oct | Series Index Sep | Percentage Point Change | Direction | Rate of Change | Trend* (Months) |
| PMI® | 50.1 | 50.2 | -0.1 | Growing | Slower | 34 |
| New Orders | 52.9 | 50.1 | +2.8 | Growing | Faster | 35 |
| Production | 52.9 | 51.8 | +1.1 | Growing | Faster | 38 |
| Employment | 47.6 | 50.5 | -2.9 | Contracting | From Growing | 1 |
| Supplier Deliveries | 50.4 | 50.2 | +0.2 | Slowing | Faster | 3 |
| Inventories | 46.5 | 48.5 | -2.0 | Contracting | Faster | 4 |
| Customers’ Inventories | 51.0 | 54.5 | -3.5 | Too High | Slower | 3 |
| Prices | 39.0 | 38.0 | +1.0 | Decreasing | Slower | 12 |
| Backlog of Orders | 42.5 | 41.5 | +1.0 | Contracting | Slower | 5 |
| Exports | 47.5 | 46.5 | +1.0 | Contracting | Slower | 5 |
| Imports | 47.0 | 50.5 | -3.5 | Contracting | From Growing | 1 |
| OVERALL ECONOMY | Growing | Slower | 77 | |||
| Manufacturing Sector | Growing | Slower | 34 | |||
Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.
*Number of months moving in current direction.
