PMI rises to 54.9% in April, hits five-month high

Manufacturing index growth fueled by better weather, but international issues raise concerns

05/01/2014


As the overall economy prepares to mark five straight years of growth, the manufacturing sector again is leading the charge.PLE0514_WEB_IMG_PMI_INDEX_CHART

The Institute for Supply Management’s PMI Index jumped in April to 54.9%, a 1.2 percentage point increase from March and the 11th straight month of growth in manufacturing. The April figure also is the highest PMI level since December 2013, indicating the slump in the first quarter of 2014 may have had more to do with weather issues throughout the eastern half of the country and less to do with fundamental weaknesses in manufacturing.

Bradley J. Holcomb, chairman of the ISM’s Manufacturing Business Survey Committee, noted that both the new orders index and the employment index both hit 11-month highs, with the employment index growing 3.6 percentage points to 54.7%

“Comments from the (committee) generally remain positive; however, some expressed concern about international economic and political issues potentially impacting demand,” said Holcomb. 

Underscoring that concern was one manufacturer’s comment about the continuing issues between Russia and Ukraine, and the response of Europe and the United States to impose economic sanctions. "Russia may stop importing medical devices manufactured completely outside of Russia,” the committee member said, adding such a decision “would have big negative impact: 5% to 10% (of) lost revenue.”

Other committee comments were generally upbeat:

  • “Business is strong and continues to grow in my industry.” (Textile Mills)
  • “Winter weather has slowed order intake but not inquiries. We think there is pent-up demand waiting for the weather to break.” (Fabricated Metal Products)
  • “U.S. remains stable, Asia is increasing in sales dramatically and Europe remains soft.” (Transportation Equipment)
  • “Overall business is up. Hiring is also up. Skilled trades in short supply.” (Transportation Equipment)
  • “Export demand picking up but seems to have no leverage to raise prices. Margins are very thin, and concerned about Chinese slowdown effect on our business.” (Chemical Products)
  • “China returned from their New Year holiday with brisk demand. Domestic markets are also doing well.” (Wood Products)
  • “Spring of 2014 is 3% to 4% better than spring of 2013 for our company.” (Machinery)

When the PMI Index is above 43.2%, it indicates an expansion of the overall economy. April marks the 59th straight month the index has been above 43.2%. “The past relationship between the PMI and the overall economy indicates that the average PMI for January through April (53.3%) corresponds to a 3.3% increase in real gross domestic product on an annualized basis,” Holcomb said.



Balakumar , Non-US/Not Applicable, India, 05/07/14 12:55 AM:

Very good and useful
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.