Manufacturing growth rebounds after summer slump

ISM report jumps above 50% level for first time since May as new orders expand

10/02/2012


For the first time since May, the Institute for Supply Management’s closely-watched PMI Index jumped past the 50 mark in September. That indicates expansion in the manufacturing sector. New orders and employment also were sharply higher for the first time this summer and sparked renewed optimism in manufacturing after a quarter of sluggish activity.

The 51.5 percent level for the PMI was 1.9 percentage points higher than August’s 49.6 figure, the largest single-month percentage point increase in more than a year. The New Orders Index registered 52.3 %, an increase of 5.2 percentage points from August, indicating growth in new orders after three consecutive months of contraction. The Production Index registered 49.5 %, an increase of 2.3 percentage points and indicating contraction in production for the second time since May 2009. The Employment Index increased by 3.1 percentage points, registering 54.7 percent. The Prices Index increased 4 percentage points from its August reading to 58%.

“Comments from the panel reflect a mix of optimism over new orders beginning to pick up, and continued concern over soft global business conditions and an unsettled political environment,” said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.”

Among those comments from ISM respondents:

  • "Appears that our so-called 'slowdown' was a summer thing. September brings with it increasing requirements and business." (Paper Products)
  • "Business improved through Q3, but is beginning to show signs of slowing down in Q4; this has been a typical trend over the last few years." (Wood Products)
  • "Business has picked up going into the last quarter." (Plastics & Rubber Products)
  • "We are sticking to our manufacturing plan, but have slowed production down considerably. Haven't added any new units to the 2012 plan, and still have no forecast for 2013 released." (Computer & Electronic Products)
  • "Sales have tanked over the last two months, bringing a very concerned and stressed management team. Not very optimistic for the near-term future." (Apparel, Leather & Allied Products)
  • "Uncertainty in the healthcare legislation (reform) continues to be the underlying force keeping our sales revenue below its full potential." (Miscellaneous Manufacturing) 

According to Holcomb, a PMI above 42.6 %, "Over a period of time, generally indicates an expansion of the overall economy. Therefore, the September PMI indicates growth for the 40th consecutive month in the overall economy, and indicates a return to growth in the manufacturing sector following three consecutive months of slight contraction."

THE LAST 12 MONTHS

Month

 

PMI™

 

 

 

Month

 

PMI™

 

Sep 2012

 

51.5

 

 

 

Mar 2012

 

53.4

 

Aug 2012

 

49.6

 

 

 

Feb 2012

 

52.4

 

Jul 2012

 

49.8

 

 

 

Jan 2012

 

54.1

 

Jun 2012

 

49.7

 

 

 

Dec 2011

 

53.1

 

May 2012

 

53.5

 

 

 

Nov 2011

 

52.2

 

Apr 2012

 

54.8

 

 

 

Oct 2011

 

51.8

 

Average for 12 months – 52.2
High – 54.8
Low – 49.6

 



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.
Integrating electrical and HVAC systems; Tracking and conserving facility water use; Energy code advancements; The future of professional engineers
Control noise, vibration in building design: Tackling acoustics and design issues; High-performance building design; NFPA 99; Combined heat, power
40 Under 40; Stand-alone medical buildings; NFPA 92; Specialty fire suppression; Applying 90.1 in lighting design
Putting COPS into context; Designing medium-voltage electrical systems; Planning and designing resilient, efficient data centers; The nine steps of designing generator fuel systems
Designing generator systems; Using online commissioning tools; Selective coordination best practices
Understanding transfer switch operation; Coordinating protective devices; Analyzing NEC 2014 changes; Cooling data centers
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.
click me