August 2015 Manufacturing ISM Report On Business Reports Expansion for Manufacturing, New Orders, Production, and Employment

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 August for the 32nd consecutive month, and the overall economy grew for the 75th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in August as the PMI registered 51.1 percent, a decrease of 1.6 percentage points from the July reading of 52.7 percent, indicating growth in manufacturing for the 32nd consecutive month.

ISM's New Orders Index registered 51.7 percent in August, a decrease of 4.8 percentage points when compared to the July reading of 56.5 percent, indicating growth in new orders for the 33rd consecutive month, but at a slower rate than in July.

ISM's Production Index registered 53.6 percent in August, which is a decrease of 2.4 percentage points when compared to the 56 percent reported in July, indicating growth in production for the 36th consecutive month.

ISM's Employment Index registered 51.2 percent in August, which is a decrease of 1.5 percentage points when compared to the 52.7 percent reported in July, indicating growth in employment for the fourth consecutive month.

The delivery performance of suppliers to manufacturing organizations was slower in August as the Supplier Deliveries Index registered 50.7 percent, which is 1.8 percentage points higher than the 48.9 percent reported in July. This month of slowing supplier deliveries follows two consecutive months of faster supplier deliveries.

The Inventories Index registered 48.5 percent in August, which is 1 percentage point lower than the 49.5 percent registered in July, indicating raw materials inventories are contracting in August for the second consecutive month.

ISM's Backlog of Orders Index registered 46.5 percent in August, an increase of 4 percentage points as compared to the July reading of 42.5 percent, indicating contraction in order backlogs for the third consecutive month, but at a slower rate than in July. Of the 86 percent of respondents who measure their backlog of orders, 17 percent reported greater backlogs, 24 percent reported smaller backlogs, and 59 percent reported no change from July.

Of the 18 manufacturing industries, 10 are reporting growth in August in the following order: Textile Mills; Furniture & Related Products; Paper Products; Nonmetallic Mineral Products; Chemical Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Fabricated Metal Products; Plastics & Rubber Products; and Machinery. The six industries reporting contraction in August — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Computer & Electronic Products; and Transportation Equipment.

Keywords: Automation, Manufacturing, Process Industries, Discrete Industries, Supply Management, PMI, ISM, ARC Advisory Group.