The August 2017 Manufacturing ISM Report On Business Says Manufacturing, New Orders, and Production Hit 12th Consecutive Month of Growth

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, and the overall economy grew for the 99th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in August as the PMI registered 58.8 percent, an increase of 2.5 percentage points from the July reading of 56.3 percent. This indicates growth in manufacturing for the 12th consecutive month and is the highest reading since April 2011, when the index registered 59.1 percent.

ISM's New Orders Index registered 60.3 percent in August, which is a decrease of 0.1 percentage point when compared to the 60.4 percent reported for July, indicating growth in new orders for the 12th consecutive month.

ISM's Production Index registered 61 percent in August, which is an increase of 0.4 percentage point when compared to the 60.6 percent reported for July, indicating growth in production for the 12th consecutive month.

ISM's Employment Index registered 59.9 percent in August, an increase of 4.7 percentage points when compared to the July reading of 55.2 percent. This indicates growth in employment in August for the 11th consecutive month. Employment levels have been expanding since October 2016 and reached the highest level of expansion since June 2011, when the index registered 61.3 percent.

The delivery performance of suppliers to manufacturing organizations was slower in August, as the Supplier Deliveries Index registered 57.1 percent. This is 1.7 percentage points higher than the 55.4 percent reported for July. This is the 16th straight month of slowing supplier deliveries, and the index achieved its highest level since December 2014, when it registered 58.3 percent.

The Inventories Index registered 55.5 percent in August, which is an increase of 5.5 percentage points when compared to the 50 percent reported for July, indicating raw materials inventories grew in August compared to July. The index reached its highest level since September 2010, when it registered 56 percent.

ISM's Backlog of Orders Index registered 57.5 percent in August, an increase of 2.5 percentage points from the 55 percent reported for July, indicating growth in order backlogs for the seventh consecutive month. Of the 90 percent of respondents who reported their backlog of orders, 28 percent reported greater backlogs, 13 percent reported smaller backlogs, and 59 percent reported no change from July.

Of the 18 manufacturing industries, 14 reported growth in August, in the following order: Textile Mills; Petroleum & Coal Products; Machinery; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; Paper Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Chemical Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; and Food, Beverage & Tobacco Products. Three industries reported contraction in August compared to July: Apparel, Leather & Allied Products; Primary Metals; and Furniture & Related Products.

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