ISM Report: PMI hovers below break-even again in August

Institute for Supply Management index remains just under 50 mark for third straight month.

09/07/2012


Institute of Supply Management logo. Courtesy: ISMManufacturing sector activity in August remained barely below the break-even line for the third consecutive month, according to the Institute of Supply Management’s monthly PMI Report.

The PMI registered 49.6%, a decrease of 0.2 percentage point from July's reading of 49.8%, indicating contraction in the manufacturing sector for the third consecutive month. This is also the lowest reading for the PMI since July 2009. The New Orders Index registered 47.1%, a decrease of 0.9 percentage point from July, indicating contraction in new orders for the third consecutive month.

The Production Index registered 47.2%, a decrease of 4.1 percentage points and indicating contraction in production for the first time since May 2009. The Employment Index remained in growth territory at 51.6%, but registered its lowest reading since November 2009 when the Employment Index registered 51%. The Prices Index increased 14.5 percentage points from its July reading to 54%. Comments from the panel generally reflect a slowdown in orders and demand, with continuing concern over the uncertain state of global economies.

"Internal indicators and feedback from sales channels are indicating a slowdown in manufacturing contracted in August as the PMI registered 49.6%, a decrease of 0.2 percentage point when compared to July's reading of 49.8%. A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.

A PMI in excess of 42.6%, over a period of time, generally indicates an expansion of the overall economy. Tthe August PMI indicates growth for the 39th consecutive month in the overall economy, but indicates contraction in the manufacturing sector for the third time since July 2009, when the PMI registered 49.2%.

The past relationship between the PMI and the overall economy indicates that the average PMI for January through August (52.2%) corresponds to a 3.2% increase in real gross domestic product. In addition, if the PMI for August (49.6%) is annualized, it corresponds to a 2.4% increase in real GDP annually.



No comments
Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
Water use efficiency: Diminishing water quality, escalating costs; Lowering building energy use; Power for fire pumps
Building envelope and integration; Manufacturing industrial Q&A; NFPA 99; Testing fire systems
Labs and research facilities: Q&A with the experts; Water heating systems; Smart building integration; 40 Under 40 winners
Maintaining low data center PUE; Using eco mode in UPS systems; Commissioning electrical and power systems; Exploring dc power distribution alternatives
Protecting standby generators for mission critical facilities; Selecting energy-efficient transformers; Integrating power monitoring systems; Mitigating harmonics in electrical systems
Commissioning electrical systems in mission critical facilities; Anticipating the Smart Grid; Mitigating arc flash hazards in medium-voltage switchgear; Comparing generator sizing software
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.