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The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected. Economic activity in the manufacturing sector expanded in September, and the overall economy grew for the 100th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.
Manufacturing expanded in September as the PMI registered 60.8 percent, an increase of 2 percentage points from the August reading of 58.8 percent. This indicates growth in manufacturing for the 13th consecutive month and is the highest reading since May 2004, when the index registered 61.4 percent.
ISM's New Orders Index registered 64.6 percent in September, which is an increase of 4.3 percentage points when compared to the 60.3 percent reported for August, indicating growth in new orders for the 13th consecutive month. Order input continues at a strong pace averaging 61.6 percent since December 2016 setting the pace for production activity.
ISM's Production Index registered 62.2 percent in September, which is an increase of 1.2 percentage points when compared to the 61.0 percent reported for August, indicating growth in production for the 13th consecutive month. "Production remains at strong growth levels in most industries, in spite of weather conditions and supplier delivery constraints experienced during the period," says Fiore, Chair of the Institute for Supply Management Manufacturing Business Survey Committee.
ISM's Employment Index registered 60.3 percent in September, an increase of 0.4 percentage point when compared to the August reading of 59.9 percent. This indicates growth in employment in September for the 12th consecutive month. Employment levels have been expanding since October 2016, and this month’s Index reading is the highest since June 2011, when it registered 61.3 percent.
The delivery performance of suppliers to manufacturing organizations was slower in September, as the Supplier Deliveries Index registered 64.4 percent. This is 7.3 percentage points higher than the 57.1 percent reported for August. This is the 17th straight month of slowing supplier deliveries, and the index achieved its highest level since July 2004, when it registered 64.5 percent.
The Inventories Index registered 52.5 percent in September, which is a decrease of 3 percentage points when compared to the 55.5 percent reported for August, indicating raw materials inventories grew in September compared to August, but at a slower rate.
The ISM Prices Index registered 71.5 percent in September, an increase of 9.5 percentage points from the August level of 62 percent indicating an increase in raw materials prices for the 19th consecutive month. In September, 45 percent of respondents reported paying higher prices, 2 percent reported paying lower prices, and 53 percent of supply executives reported paying the same prices as in August. The Prices Index is at its highest level since May 2011, when it registered 76.5 percent.
ISM's Backlog of Orders Index registered 58 percent in September, an increase of 0.5 percentage point from the 57.5 percent reported for August, indicating growth in order backlogs for the eighth consecutive month. Of the 89 percent of respondents who reported their backlog of orders, 29 percent reported greater backlogs, 13 percent reported smaller backlogs, and 58 percent reported no change from August.
Of the 18 manufacturing industries, 17 reported growth in September, in the following order: Textile Mills; Machinery; Nonmetallic Mineral Products; Transportation Equipment; Plastics & Rubber Products; Paper Products; Wood Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; Petroleum & Coal Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; and Primary Metals. One industry, Furniture & Related Products, reported contraction in September compared to August.