Quantcast
Last updated on April 16, 2014 at 1:21 EDT

PMI(TM) at 51.3%; March Manufacturing ISM Report On Business®; New Orders, Production and Employment Growing; Inventories Contracting; Supplier Deliveries Faster

April 1, 2013

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of March 2013.


TEMPE, Ariz., April 1, 2013 /PRNewswire/ — Economic activity in the manufacturing sector expanded in March for the fourth consecutive month, and the overall economy grew for the 46th 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((TM)) Manufacturing Business Survey Committee. “The PMI((TM)) registered 51.3 percent, a decrease of 2.9 percentage points from February’s reading of 54.2 percent, indicating expansion in manufacturing for the fourth consecutive month, but at a slower rate. Both the New Orders and Production Indexes reflected growth in March compared to February, albeit at slower rates, registering 51.4 and 52.2 percent, respectively. The Employment Index registered 54.2, an increase of 1.6 percentage points compared to February’s reading of 52.6 percent. The Prices Index decreased 7 percentage points to 54.5, and the list of commodities up in price reflected far fewer items than in February. In addition, the Backlog of Orders, Exports and Imports Indexes all grew in March.”

Of the 18 manufacturing industries, 14 are reporting growth in March in the following order: Wood Products; Furniture & Related Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Paper Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Computer & Electronic Products; Transportation Equipment; Printing & Related Support Activities; Primary Metals; and Food, Beverage & Tobacco Products. The three industries reporting contraction in March are: Petroleum & Coal Products; Chemical Products; and Machinery.

WHAT RESPONDENTS ARE SAYING …

  • “Beginning to feel the seasonal upswing in business — energy and resin remain a concern.” (Food, Beverage & Tobacco Products)
  • “Medical reimbursements from insurance companies, particularly Medicare, are slowing.” (Miscellaneous Manufacturing)
  • “While the second half of 2013 looks promising, the first half is a mixed bag.” (Computer & Electronic Products)
  • “Things seem slightly better than last year, but still not great.” (Printing & Related Support Activities)
  • “Automotive is still very strong.” (Fabricated Metal Products)
  • “Post-election in the U.S. — companies within the oil and gas sector are still waiting for signs of some regulatory certainty or stability.” (Petroleum & Coal Products)
  • “Reduced government spending in the defense sector lowers business output.” (Transportation Equipment)
  • “Business is continuing to be brisk.” (Furniture & Related Products)
  • “Market continues to be strong, and our production is exceeding plans at this time.” (Wood Products)
  • “Sales are low, even adjusted for seasonal variation.” (Chemical Products)
                                                                                            MANUFACTURING AT A GLANCE

                                                                                                   MARCH 2013

    Index                                   Series Index        Series Index               Percentage                     Direction                      Rate of Change                Trend* (Months)

                                                 Mar                 Feb                     Point

                                                                                               Change

    PMI(TM)                                            51.3                54.2                           -2.9             Growing                           Slower                                      4

    New Orders                                         51.4                57.8                           -6.4             Growing                           Slower                                      3

    Production                                         52.2                57.6                           -5.4             Growing                           Slower                                      7

    Employment                                         54.2                52.6                           +1.6             Growing                           Faster                                     42

    Supplier Deliveries                                49.4                51.4                           -2.0              Faster                        From Slowing                                   1

    Inventories                                        49.5                51.5                           -2.0           Contracting                      From Growing                                   1

    Customers' Inventories                             47.5                46.5                           +1.0             Too Low                           Slower                                     16

    Prices                                             54.5                61.5                           -7.0            Increasing                         Slower                                      8

    Backlog of Orders                                  51.0                55.0                           -4.0             Growing                           Slower                                      2

    Exports                                            56.0                53.5                           +2.5             Growing                           Faster                                      4

    Imports                                            54.0                54.0                            0.0             Growing                            Same                                       2

                                                 OVERALL ECONOMY                                                           Growing                           Slower                                     46

                                                             Manufacturing Sector

                  Growing                      Slower                         4
    *Number of months moving
     in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price
Corrugated Boxes (8); HDPE (3); Lumber (3); Pallets; Plastic Resins (2); and Polypropylene (5).

Commodities Down in Price
Sugar; and Wheat (3).

Commodities in Short Supply
No commodities are reported in short supply.

Note: The number of consecutive months the commodity is listed is indicated after each item.

MARCH 2013 MANUFACTURING INDEX SUMMARIES

PMI(TM)( )

Manufacturing expanded in March as the PMI((TM)) registered 51.3 percent, a decrease of 2.9 percentage points when compared to February’s reading of 54.2 percent. This month’s reading reflects the fourth consecutive month of growth in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI((TM)) in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the March PMI((TM)) indicates growth for the 46th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the fourth consecutive month. Holcomb stated, “The past relationship between the PMI((TM)) and the overall economy indicates that the average PMI((TM)) for January through March (52.9 percent) corresponds to a 3.3 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI((TM)) for March (51.3 percent) is annualized, it corresponds to a 2.8 percent increase in real GDP annually.”

THE LAST 12 MONTHS

             Month PMI(TM)                          Month   PMI(TM)
             -----  ------                          -----    ------

    Mar 2013                51.3                   Sep 2012         51.6
    --------                ----                   --------         ----

    Feb 2013                54.2                   Aug 2012         50.7
    --------                ----                   --------         ----

    Jan 2013                53.1                   Jul 2012         50.5
    --------                ----                   --------         ----

    Dec 2012                50.2                   Jun 2012         50.2
    --------                ----                   --------         ----

    Nov 2012                49.9                   May 2012         52.5
    --------                ----                   --------         ----

    Oct 2012                51.7                   Apr 2012         54.1
    --------                ----                   --------         ----

                      Average for 12 months - 51.7

                              High - 54.2

                               Low - 49.9
                               ----------

New Orders

ISM’s New Orders Index registered 51.4 percent in March, a decrease of 6.4 percentage points when compared to the February reading of 57.8 percent. This represents growth in new orders for the third consecutive month. A New Orders Index above 52.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The 12 industries reporting growth in new orders in March — listed in order — are: Wood Products; Furniture & Related Products; Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Fabricated Metal Products; Miscellaneous Manufacturing; Transportation Equipment; Plastics & Rubber Products; Machinery; Paper Products; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. The two industries reporting a decrease in new orders during March are: Petroleum & Coal Products; and Primary Metals.

         New Orders %Better    %Same    %Worse    Net     Index

    Mar 2013                31       52        17     +14       51.4

    Feb 2013                37       47        16     +21       57.8

    Jan 2013                28       51        21      +7       53.3

    Dec 2012                24       45        31      -7       49.7

Production

ISM’s Production Index registered 52.2 percent in March, which is a decrease of 5.4 percentage points when compared to the 57.6 percent reported in February. This indicates growth in production for the seventh consecutive month. An index above 51.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

The 13 industries reporting growth in production during the month of March — listed in order — are: Wood Products; Paper Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Apparel, Leather & Allied Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Primary Metals; Fabricated Metal Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The two industries reporting a decrease in production in March are: Machinery; and Chemical Products.

             Production %Better    %Same    %Worse    Net     Index

    Mar 2013                    33       51        16     +17       52.2

    Feb 2013                    36       49        15     +21       57.6

    Jan 2013                    25       56        19      +6       53.6

    Dec 2012                    21       54        25      -4       52.6

Employment

ISM’s Employment Index registered 54.2 percent in March, which is 1.6 percentage points higher than the 52.6 percent reported in February. This month’s reading indicates growth in employment for the 42nd consecutive month. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, 10 reported growth in employment in March in the following order: Plastics & Rubber Products; Furniture & Related Products; Wood Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Fabricated Metal Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Machinery. The three industries reporting a decrease in employment in March are: Transportation Equipment; Chemical Products; and Apparel, Leather & Allied Products.

    Employment %Higher    %Same    %Lower    Net    Index

    Mar 2013           24       60        16     +8       54.2

    Feb 2013           21       65        14     +7       52.6

    Jan 2013           17       71        12     +5       54.0

    Dec 2012           19       62        19      0       51.9

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was faster in March as the Supplier Deliveries Index registered 49.4 percent, which is 2 percentage points lower than the 51.4 percent reported in February. This indicates the first month of faster supplier deliveries, following four consecutive months of slower deliveries. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The seven industries reporting slower supplier deliveries in March — listed in order — are: Primary Metals; Furniture & Related Products; Computer & Electronic Products; Fabricated Metal Products; Miscellaneous Manufacturing; Chemical Products; and Electrical Equipment, Appliances & Components. The four industries reporting faster supplier deliveries in March are: Nonmetallic Mineral Products; Petroleum & Coal Products; Paper Products; and Food, Beverage & Tobacco Products. Seven industries reported no change in supplier deliveries in March compared to February.

    Supplier Deliveries %Slower    %Same    %Faster   Net    Index

    Mar 2013                    11       82         7     +4       49.4

    Feb 2013                     9       84         7     +2       51.4

    Jan 2013                    10       85         5     +5       53.6

    Dec 2012                     9       83         8     +1       53.7

Inventories*

The Inventories Index registered 49.5 percent in March, which is 2 percentage points lower than the 51.5 percent reported in February. This month’s reading indicates that respondents are reporting inventories are contracting in March, following two consecutive months of growth. An Inventories Index greater than 42.7 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis’ (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The seven industries reporting higher inventories in March — listed in order — are: Plastics & Rubber Products; Wood Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Paper Products; Transportation Equipment; and Fabricated Metal Products. The seven industries reporting decreases in inventories in March — listed in order — are: Primary Metals; Miscellaneous Manufacturing; Computer & Electronic Products; Machinery; Food, Beverage & Tobacco Products; Chemical Products; and Apparel, Leather & Allied Products.

    Inventories %Higher    %Same    %Lower    Net     Index

    Mar 2013            20       59        21      -1       49.5

    Feb 2013            22       59        19      +3       51.5

    Jan 2013            20       62        18      +2       51.0

    Dec 2012            14       58        28     -14       43.0

Customers’ Inventories*

The ISM Customers’ Inventories Index registered 47.5 percent in March, which is 1 percentage point higher than in February when the index registered 46.5 percent. This month’s reading indicates that customers’ inventories are considered too low, but slightly higher than reported in February. Customers’ inventories have registered at or below 50 percent for 48 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.

The six manufacturing industries reporting customers’ inventories as being too high during the month of March — listed in order — are: Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Chemical Products; Machinery; and Miscellaneous Manufacturing. The seven industries reporting customers’ inventories as too low during March — listed in order — are: Electrical Equipment, Appliances & Components; Transportation Equipment; Computer & Electronic Products; Plastics & Rubber Products; Furniture & Related Products; Fabricated Metal Products; and Apparel, Leather & Allied Products.

     Customers'
     Inventories % Reporting    % Too High   % About Right    %Too Low    Net    Index

     Mar
     2013                    75           14               67          19     -5       47.5

     Feb
     2013                    69           11               71          18     -7       46.5

     Jan
     2013                    71           14               69          17     -3       48.5

     Dec
     2012                    64           19               56          25     -6       47.0

Prices*

The ISM Prices Index registered 54.5 percent in March, which is a decrease of 7 percentage points compared to the February reading of 61.5 percent. In March, 21 percent of respondents reported paying higher prices, 12 percent reported paying lower prices, and 67 percent of supply executives reported paying the same prices as in February. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.

Of the 18 manufacturing industries, 10 reported paying increased prices during the month of March in the following order: Textile Mills; Petroleum & Coal Products; Plastics & Rubber Products; Wood Products; Furniture & Related Products; Paper Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Chemical Products; and Electrical Equipment, Appliances & Components. The six industries reporting paying lower prices during March — listed in order — are: Nonmetallic Mineral Products; Computer & Electronic Products; Machinery; Transportation Equipment; Fabricated Metal Products; and Food, Beverage & Tobacco Products.

    Prices   %Higher    %Same    %Lower    Net     Index

    Mar 2013         21       67        12      +9       54.5

    Feb 2013         31       61         8     +23       61.5

    Jan 2013         23       67        10     +13       56.5

    Dec 2012         18       75         7     +11       55.5

Backlog of Orders*

ISM’s Backlog of Orders Index registered 51 percent in March, which is 4 percentage points lower than the 55 percent reported in February. This is the second month of growth in order backlogs since March 2012, when the index registered 52.5 percent. Of the 85 percent of respondents who reported their backlog of orders, 22 percent reported greater backlogs, 20 percent reported smaller backlogs, and 58 percent reported no change from February.

The eight industries reporting increased order backlogs in March — listed in order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Primary Metals; Furniture & Related Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; and Machinery. The seven industries reporting decreases in order backlogs during March — listed in order — are: Plastics & Rubber Products; Transportation Equipment; Paper Products; Computer & Electronic Products; Miscellaneous Manufacturing; Chemical Products; and Petroleum & Coal Products.

          Backlog
             of
           Orders % Reporting    %Greater    %Same    %Less    Net     Index

    Mar
     2013                     85          22       58       20      +2       51.0

    Feb
     2013                     83          26       58       16     +10       55.0

    Jan
     2013                     85          20       55       25      -5       47.5

    Dec
     2012                     86          22       53       25      -3       48.5

New Export Orders*

ISM’s New Export Orders Index registered 56 percent in March, which is 2.5 percentage points higher than the 53.5 percent reported in February. This month’s reading represents the fourth consecutive month of growth in new export orders, and follows six months of contraction dating back to June 2012.

The 12 industries reporting growth in new export orders in March — listed in order — are: Wood Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Plastics & Rubber Products; Paper Products; Transportation Equipment; Fabricated Metal Products; Miscellaneous Manufacturing; Machinery; Computer & Electronic Products; and Chemical Products. The two industries reporting a decrease in new export orders during March are: Primary Metals; and Furniture & Related Products.

           New
          Export
          Orders % Reporting    %Higher    %Same    %Lower    Net     Index

    Mar
     2013                    77         22       68        10     +12       56.0

    Feb
     2013                    73         16       75         9      +7       53.5

    Jan
     2013                    72         12       77        11      +1       50.5

    Dec
     2012                    74         16       71        13      +3       51.5

Imports*

ISM’s Imports Index registered 54 percent in March, which is the same reading as reported in February. This month’s reading indicates that import levels are growing for the third time in the past four months.

The nine industries reporting growth in imports during the month of March — listed in order — are: Wood Products; Apparel, Leather & Allied Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Computer & Electronic Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Furniture & Related Products. The three industries reporting a decrease in imports during March are: Primary Metals; Machinery; and Chemical Products.

    Imports  % Reporting    %Higher    %Same    %Lower    Net    Index

    Mar 2013             77         18       72        10     +8       54.0

    Feb 2013             75         20       68        12     +8       54.0

    Jan 2013             75         13       74        13      0       50.0

    Dec 2012             77         16       71        13     +3       51.5

* The Inventories, Customers’ Inventories, Prices, Backlog of Orders, New Export Orders and Imports Indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy

Average commitment lead time for Capital Expenditures increased 2 days to 114 days. Average lead time for Production Materials increased 1 day to 57 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 1 day to 26 days.

                                               Percent Reporting

    Capital
     Expenditures Hand-to-Mouth   30 Days    60 Days           90 Days    6 Months    1 Year+    Average Days

    Mar 2013                   28          7           9               19          25         12              114

    Feb 2013                   28         10           9               18          22         13              112

    Jan 2013                   27          7          12               14          26         14              120

    Dec 2012                   25          9          13               16          24         13              116
    Production
     Materials   Hand-to-Mouth   30 Days    60 Days    90 Days    6 Months   1 Year+   Average Days

    Mar 2013                  17         37         26         13          4         3              57

    Feb 2013                  17         35         27         14          5         2              56

    Jan 2013                  16         35         26         16          4         3              59

    Dec 2012                  16         40         22         17          3         2              54

    MRO Supplies Hand-to-Mouth   30 Days    60 Days    90 Days    6 Months   1 Year+   Average Days

    Mar 2013                  44         39         13          3          1         0              26

    Feb 2013                  47         38         10          4          1         0              25

    Jan 2013                  44         39         12          4          0         1              28

    Dec 2012                  46         39         10          4          1         0              25

About this Report

The data presented herein is obtained from a survey of manufacturing supply managers based on information they have collected within their respective organizations. ISM makes no representation, other than that stated within this release, regarding the individual company data collection procedures. Use of the data is in the public domain and should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation

The Manufacturing ISM Report On Business(®) is based on data compiled from purchasing and supply executives nationwide. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers’ Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (PMI((TM)), New Orders, Production, Employment and Supplier Deliveries) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The PMI((TM)) is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), and Inventories.

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI((TM)) reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI((TM)) in excess of 42.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.2 percent, it is generally declining. The distance from 50 percent or 42.2 percent is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis.

The Manufacturing ISM Report On Business(®) surveys are sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM then compiles the reports for release on the first business day of the following month.

The industries reporting growth, as indicated in the Manufacturing ISM Report On Business(®) monthly reports, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

Responses to Buying Policy reflect the percent reporting the current month’s lead time, the approximate weighted number of days ahead for which commitments are made for Production Materials; Capital Expenditures; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern.

The Manufacturing ISM Report On Business(®) is published monthly by the Institute for Supply Management((TM)), the first supply institute in the world. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM Report On Business(®)( )is posted on ISM’s website at www.ism.ws on the first business day of every month after 10:10 a.m. (ET).

The next Manufacturing ISM Report On Business(®) featuring the April 2013 data will be released at 10:00 a.m. (ET) on Wednesday, May 1, 2013.

    Contact:                   Rose Marie Goupil

                               ISM, ROB Media Relations

                               Tempe, Arizona

                               800/888-6276, Ext. 3015

                               E-mail: rgoupil@ism.ws

(Logo: http://photos.prnewswire.com/prnh/20121101/LA02871LOGO)

SOURCE Institute for Supply Management


Source: PR Newswire