Manufacturing Activity Up in Sept., 26th Consecutive Month

Filed under: News,The Economy |

The economy is showing clear signs that it is improving with manufacturing activity rising for the 26th consecutive month. Unfortunately it is improving very slowly as the 03 Oct 2011,  Institute for Supply Management Report On Business report indicates.

From the Institute for Supply Management:

Economic activity in the manufacturing sector expanded in September for the 26th consecutive month, and the overall economy grew for the 28th consecutive month, according to the latest Manufacturing Institute for Supply Management Report On Business.

Slow growth ahead
Slow growth ahead

The report was issued today, 3 Oct. 2011, by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

“The PMI registered 51.6%, an increase of 1 percentage point from August, indicating expansion in the manufacturing sector for the 26th consecutive month, at a slightly higher rate. The Production Index registered 51.2%, indicating a return to growth after contracting in August for the first time since May of 2009. The New Orders Index remained unchanged from August at 49.6%, indicating contraction for the third consecutive month. The Backlog of Orders Index decreased 4.5 percentage points to 41.5%, contracting for the fourth consecutive month and reaching its lowest level since April 2009, when it registered 40.5%. Comments from respondents generally reflect concern over the sluggish economy, political and policy uncertainty in Washington, and forecasts of ongoing high unemployment that will continue to put pressure on demand for manufactured products.”


Of the 18 manufacturing industries, 12 are reporting growth in September, in the following order: Wood Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Plastics & Rubber Products; Printing & Related Support Activities; Chemical Products; and Computer & Electronic Products. The six industries reporting contraction in September — listed in order — are: Primary Metals; Textile Mills; Furniture & Related Products; Fabricated Metal Products; Paper Products; and Electrical Equipment, Appliances & Components.


“The economy continues to be a drag on our business outlook. We are trying to deal with new and additional FDA regulations which are costing significant dollars. It is hard to recoup any of these additional costs in our pricing levels without losing significant sales volumes.” (Chemical Products)
“Market is cautious, but still steady.” (Electrical Equipment, Appliances & Components)
“Global demand for semiconductors is down and maybe not yet ‘bottomed out.’ Inventory reduction activities are a priority.” (Computer & Electronic Products)
“Still strong automotive demand.” (Fabricated Metal Products)
“Orders remain consistent and steady — no sign of lower demand.” (Paper Products)
“Japan supply chain issues are over, but exchange rates and raw material prices are hurting our profit.” (Transportation Equipment)
“We sense a weakening in demand, but it is not extreme at this point.” (Plastics & Rubber Products)
“Overall, business is improving with a measurable uptick in orders this month. Part of that is due to pre-holiday season orders.” (Miscellaneous Manufacturing)
“Business continues to be sluggish.” (Furniture & Related Products)

























PMI 51.6 50.6 +1.0 Growing Faster 26
New Orders 49.6 49.6 0.0 Contracting Same 3
Production 51.2 48.6 +2.6 Growing From Contacting 1
Employment 53.8 51.8 +2.0 Growing Faster 24
Supplier Deliveries 51.4 50.6 +0.8 Slowing Faster 28
Inventories 52.0 52.3 -0.3 Growing Slower 2
Customers’ Inventories 49.0 46.5 +2.5 Too Low Slower 30
Prices 56.0 55.5 +0.5 Increasing Faster 27
Backlog of Orders 41.5 46.0 -4.5 Contracting Faster 4
Exports 53.5 50.5 +3.0 Growing Faster 27
Imports 54.5 55.5 -1.0 Growing Slower 25
OVERALL ECONOMY Growing Faster 28
Manufacturing Sector Growing Faster 26

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