ISM July 2011 Report
Economic activity in the manufacturing sector expanded in July for the 24th consecutive month, and the overall economy grew for the 26th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
“With products sold internationally, the business conditions we are currently experiencing are declining from abnormally [high] record-breaking levels. Business conditions are currently flattening to more normal volumes, while trending slightly downward.”Tweet this
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI registered 50.9 percent, a decrease of 4.4 percentage points, indicating expansion in the manufacturing sector for the 24th consecutive month, although at a slower rate of growth than in June. Production and employment also showed continued growth in July, but at slower rates than in June. The New Orders Index registered 49.2 percent, indicating contraction for the first time since June of 2009, when it registered 48.9 percent. The rate of increase in prices slowed for the third consecutive month, dropping 9 percentage points in July to 59 percent. In the last three months combined, the Prices Index has declined by 26.5 percentage points, dropping from 85.5 percent in April to 59 percent in July. Despite relief in pricing, however, several comments suggest a slowdown in domestic demand in the short term, while export orders continue to remain strong.”
PERFORMANCE BY INDUSTRY
Of the 18 manufacturing industries, 10 are reporting growth in July, in the following order: Paper Products; Furniture & Related Products; Computer & Electronic Products; Transportation Equipment; Wood Products; Petroleum & Coal Products; Printing & Related Support Activities; Primary Metals; Fabricated Metal Products; and Nonmetallic Mineral Products. The seven industries reporting contraction in July — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Textile Mills; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Machinery; and Chemical Products.
WHAT RESPONDENTS ARE SAYING …
- “Inflation pressures have finally slowed down.” (Chemical Products)
- “With products sold internationally, the business conditions we are currently experiencing are declining from abnormally [high] record-breaking levels. Business conditions are currently flattening to more normal volumes, while trending slightly downward.” (Machinery)
- “Market conditions — Europe weak, U.S. soft, Asia strong.” (Computer & Electronic Products)
- “Demand from automotive manufacturers continues to improve.” (Fabricated Metal Products)
- “Export sales very strong, while domestic sales are sluggish.” (Paper Products)
- “The looming debt ceiling has government agencies backing away from spending. Forecasting a slowdown in demand in the short term.” (Transportation Equipment)
- “Generally seeing a slowdown, which is typical this time of year. Hopeful that this is seasonal only.” (Plastics & Rubber Products)
- “Most industrial customers seem to be sustaining their business. Export orders continue to remain strong. Price pressures persist, especially with commodity materials.” (Chemical Products)
| MANUFACTURING AT A GLANCE JULY 2011 | ||||||||||||||||||
| Index | Series Index Jul | Series Index Jun | Percentage Point Change | Direction | Rate of Change | Trend(a) (Months) | ||||||||||||
| PMI | 50.9 | 55.3 | -4.4 | Growing | Slower | 24 | ||||||||||||
| New Orders | 49.2 | 51.6 | -2.4 | Contracting | From Growing | 1 | ||||||||||||
| Production | 52.3 | 54.5 | -2.2 | Growing | Slower | 26 | ||||||||||||
| Employment | 53.5 | 59.9 | -6.4 | Growing | Slower | 22 | ||||||||||||
| Supplier Deliveries | 50.4 | 56.3 | -5.9 | Slowing | Slower | 26 | ||||||||||||
| Inventories | 49.3 | 54.1 | -4.8 | Contracting | From Growing | 1 | ||||||||||||
| Customers’ Inventories | 44.0 | 47.0 | -3.0 | Too Low | Faster | 28 | ||||||||||||
| Prices | 59.0 | 68.0 | -9.0 | Increasing | Slower | 25 | ||||||||||||
| Backlog of Orders | 45.0 | 49.0 | -4.0 | Contracting | Faster | 2 | ||||||||||||
| Exports | 54.0 | 53.5 | +0.5 | Growing | Faster | 25 | ||||||||||||
| Imports | 53.5 | 51.0 | +2.5 | Growing | Faster | 23 | ||||||||||||
| OVERALL ECONOMY Manufacturing Sector | Growing | Slower | 26 | |||||||||||||||
| Growing | Slower | 24 |
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(a) Number of months moving in current direction
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum (11); Brass; Copper (12); Copper Based Products (9); Electric/Electronic Components; Metal Parts; Plastic Products (7); Polyethylene(b) (2); Rubber Products (6); Steel(b) (11); Steel Products (8); and Titanium Dioxide (4).
Commodities Down in Price
Corn; Diesel Fuel; Ethylene; Gasoline; HDPE; LDPE; Polyethylene(b); Polypropylene; Soybean Oil; Steel(b) (3); and Wheat.
Commodities in Short Supply
Butadiene; and Electric/Electronic Components (7).
Note: The number of consecutive months the commodity is listed is indicated after each item.
(b) Reported as both up and down in price.
JULY 2011 MANUFACTURING INDEX SUMMARIES
PMI
Manufacturing continued its growth in July as the PMI registered 50.9 percent, a decrease of 4.4 percentage points when compared to June’s reading of 55.3 percent. The PMI registered the lowest reading since July 2009, when it registered 49 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI in excess of 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 26th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 24th consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economyindicates that the average PMI for January through July (57.6 percent) corresponds to a 5.3 percent increase in real gross domestic product (GDP). In addition, if the PMI for July (50.9 percent) is annualized, it corresponds to a 2.9 percent increase in real GDP annually.”
THE LAST 12 MONTHS
| Month | PMI | Month | PMI | ||||||||||||||||||||||||||||||||||||||||
| Jul 2011 | 50.9 | Jan 2011 | 60.8 | ||||||||||||||||||||||||||||||||||||||||
| Jun 2011 | 55.3 | Dec 2010 | 58.5 | ||||||||||||||||||||||||||||||||||||||||
| May 2011 | 53.5 | Nov 2010 | 58.2 | ||||||||||||||||||||||||||||||||||||||||
| Apr 2011 | 60.4 | Oct 2010 | 56.9 | ||||||||||||||||||||||||||||||||||||||||
| Mar 2011 | 61.2 | Sep 2010 | 55.3 | ||||||||||||||||||||||||||||||||||||||||
| Feb 2011 | 61.4 | Aug 2010 | 55.2 | ||||||||||||||||||||||||||||||||||||||||
| Average for 12 months – 57.3 High – 61.4 Low – 50.9 |
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New Orders
ISM’s New Orders Index registered 49.2 percent in July, which is a decrease of 2.4 percentage points when compared to the 51.6 percent reported in June. This is the first month of contraction in the New Orders Index since June of 2009, when it registered 48.9 percent. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The nine industries reporting growth in new orders in July — listed in order — are: Petroleum & Coal Products; Wood Products; Paper Products; Furniture & Related Products; Transportation Equipment; Food, Beverage & Tobacco Products; Fabricated Metal Products; Computer & Electronic Products; and Chemical Products. The seven industries reporting decreases in new orders in July — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Textile Mills; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; and Machinery.
| New Orders | %Better | %Same | %Worse | Net | Index | |||||||||||||||||||||
| Jul 2011 | 24 | 53 | 23 | +1 | 49.2 | |||||||||||||||||||||
| Jun 2011 | 34 | 43 | 23 | +11 | 51.6 | |||||||||||||||||||||
| May 2011 | 30 | 54 | 16 | +14 | 51.0 | |||||||||||||||||||||
| Apr 2011 | 49 | 43 | 8 | +41 | 61.7 |
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Production
ISM’s Production Index registered 52.3 percent in July, which is a decrease of 2.2 percentage points when compared to the June reading of 54.5 percent. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures. This is the 26th consecutive month the Production Index has registered above 50 percent.
The seven industries reporting growth in production during the month of July — listed in order — are: Printing & Related Support Activities; Computer & Electronic Products; Furniture & Related Products; Miscellaneous Manufacturing; Paper Products; Fabricated Metal Products; and Transportation Equipment. The seven industries reporting a decrease in production in July — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Textile Mills; Nonmetallic Mineral Products; Machinery; Chemical Products; and Electrical Equipment, Appliances & Components.
| Production | %Better | %Same | %Worse | Net | Index | |||||||||||||||||||||
| Jul 2011 | 22 | 60 | 18 | +4 | 52.3 | |||||||||||||||||||||
| Jun 2011 | 35 | 46 | 19 | +16 | 54.5 | |||||||||||||||||||||
| May 2011 | 30 | 56 | 14 | +16 | 54.0 | |||||||||||||||||||||
| Apr 2011 | 43 | 52 | 5 | +38 | 63.8 |
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Employment
ISM’s Employment Index registered 53.5 percent in July, which is 6.4 percentage points lower than the 59.9 percent reported in June. While this month represents the 22nd consecutive month of growth in manufacturing employment, the July reading is also the lowest reading since December 2009, when the index registered 53.2 percent. An Employment Index above 50.1 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, nine reported growth in employment in July in the following order: Computer & Electronic Products; Paper Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Machinery; and Chemical Products. The five industries reporting a decrease in employment in July are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Plastics & Rubber Products; and Food, Beverage & Tobacco Products.
| Employment | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
| Jul 2011 | 24 | 63 | 13 | +11 | 53.5 | |||||||||||||||||||||
| Jun 2011 | 34 | 56 | 10 | +24 | 59.9 | |||||||||||||||||||||
| May 2011 | 31 | 60 | 9 | +22 | 58.2 | |||||||||||||||||||||
| Apr 2011 | 34 | 61 | 5 | +29 | 62.7 |
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Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was slower in July as the Supplier Deliveries Index registered 50.4 percent, which is 5.9 percentage points lower than the 56.3 percent registered in June. This is the 26th consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.
The nine industries reporting slower supplier deliveries in July — listed in order — are: Petroleum & Coal Products; Furniture & Related Products; Miscellaneous Manufacturing; Primary Metals; Transportation Equipment; Machinery; Electrical Equipment, Appliances & Components; Chemical Products; and Computer & Electronic Products. The only industry reporting faster deliveries in July is Fabricated Metal Products. Eight industries reported no change in supplier deliveries in July compared to June.
| Supplier Deliveries | %Slower | %Same | %Faster | Net | Index | |||||||||||||||||||||
| Jul 2011 | 13 | 80 | 7 | +6 | 50.4 | |||||||||||||||||||||
| Jun 2011 | 18 | 78 | 4 | +14 | 56.3 | |||||||||||||||||||||
| May 2011 | 22 | 70 | 8 | +14 | 55.7 | |||||||||||||||||||||
| Apr 2011 | 24 | 73 | 3 | +21 | 60.2 |
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Inventories
The Inventories Index registered 49.3 percent in July, 4.8 percentage points lower than the 54.1 percent reported in June. 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 four industries reporting higher inventories in July are: Nonmetallic Mineral Products; Computer & Electronic Products; Machinery; and Transportation Equipment. The nine industries reporting decreases in inventories in July — listed in order — are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Textile Mills; Printing & Related Support Activities; Fabricated Metal Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Chemical Products. Five industries reported no change in inventories in July compared to June.
| Inventories | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
| Jul 2011 | 18 | 60 | 22 | -4 | 49.3 | |||||||||||||||||||||
| Jun 2011 | 23 | 61 | 16 | +7 | 54.1 | |||||||||||||||||||||
| May 2011 | 20 | 57 | 23 | -3 | 48.7 | |||||||||||||||||||||
| Apr 2011 | 27 | 55 | 18 | +9 | 53.6 |
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Customers’ Inventories(c)
The ISM Customers’ Inventories Index registered 44 percent in July, 3 percentage points lower than in June when the index registered 47 percent. This is the 28th consecutive month the Customers’ Inventories Index has been below 50 percent, indicating that respondents believe their customers’ inventories are too low at this time.
The two manufacturing industries reporting customers’ inventories as being too high during July are: Apparel, Leather & Allied Products; and Fabricated Metal Products. The 10 industries reporting customers’ inventories as too low during July — listed in order — are: Petroleum & Coal Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Transportation Equipment; Printing & Related Support Activities; Paper Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; and Chemical Products. Six industries reported no change in customers’ inventories for the month of July compared to June.
| Customers’ Inventories | % Reporting | %Too High | %About Right | %Too Low | Net | Index | |||||||||||||||
| Jul 2011 | 72 | 11 | 66 | 23 | -12 | 44.0 | |||||||||||||||
| Jun 2011 | 70 | 13 | 68 | 19 | -6 | 47.0 | |||||||||||||||
| May 2011 | 72 | 6 | 67 | 27 | -21 | 39.5 | |||||||||||||||
| Apr 2011 | 73 | 9 | 63 | 28 | -19 | 40.5 |
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Prices(c)
The ISM Prices Index registered 59 percent in July, 9 percentage points lower than the 68 percent reported in June. This is the third consecutive month the Prices Index has registered below 80 percent since December 2010, and is the 25th consecutive month the index has registered above 50 percent. While 35 percent of respondents reported paying higher prices and 17 percent reported paying lower prices, 48 percent of supply executives reported paying the same prices as in June. A Prices Index above 49.4 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 report paying increased prices during the month of July, in the following order: Nonmetallic Mineral Products; Paper Products; Petroleum & Coal Products; Machinery; Chemical Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Transportation Equipment; and Primary Metals. The three manufacturing industries reporting paying lower prices on average in July are: Miscellaneous Manufacturing; Fabricated Metal Products; and Food, Beverage & Tobacco Products. Five industries reported no change in prices for the month of July compared to June.
| Prices | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
| Jul 2011 | 35 | 48 | 17 | +18 | 59.0 | |||||||||||||||||||||
| Jun 2011 | 48 | 40 | 12 | +36 | 68.0 | |||||||||||||||||||||
| May 2011 | 58 | 37 | 5 | +53 | 76.5 | |||||||||||||||||||||
| Apr 2011 | 72 | 27 | 1 | +71 | 85.5 |
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Backlog of Orders(c)
ISM’s Backlog of Orders Index registered 45 percent in July, which is 4 percentage points lower than the 49 percent reported in June. Of the 81 percent of respondents who reported their backlog of orders, 16 percent reported greater backlogs, 26 percent reported smaller backlogs, and 58 percent reported no change from June.
The four industries reporting increased order backlogs in July are: Petroleum & Coal Products; Paper Products; Furniture & Related Products; and Computer & Electronic Products. The nine industries reporting decreases in order backlogs during July — listed in order — are: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Plastics & Rubber Products; Machinery; Transportation Equipment; Fabricated Metal Products; Electrical Equipment, Appliances & Components; and Chemical Products.
| Backlog of Orders | % Reporting | %Greater | %Same | %Less | Net | Index | ||||||||||||||
| Jul 2011 | 81 | 16 | 58 | 26 | -10 | 45.0 | ||||||||||||||
| Jun 2011 | 84 | 24 | 50 | 26 | -2 | 49.0 | ||||||||||||||
| May 2011 | 85 | 21 | 59 | 20 | +1 | 50.5 | ||||||||||||||
| Apr 2011 | 88 | 34 | 54 | 12 | +22 | 61.0 |
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New Export Orders(c)
ISM’s New Export Orders Index registered 54 percent in July, which is 0.5 percentage point higher than the 53.5 percent reported in June. This is the 25th consecutive month of growth in the New Export Orders Index.
The nine industries reporting growth in new export orders in July — listed in order — are: Paper Products; Primary Metals; Miscellaneous Manufacturing; Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Transportation Equipment; Machinery; and Chemical Products. The four industries reporting a decrease in new export orders during July are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components.
| New Export Orders | % Reporting | %Higher | %Same | %Lower | Net | Index | |||||||||||||||
| Jul 2011 | 77 | 19 | 70 | 11 | +8 | 54.0 | |||||||||||||||
| Jun 2011 | 76 | 17 | 73 | 10 | +7 | 53.5 | |||||||||||||||
| May 2011 | 79 | 20 | 70 | 10 | +10 | 55.0 | |||||||||||||||
| Apr 2011 | 81 | 28 | 68 | 4 | +24 | 62.0 |
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Imports(c)
Imports of materials by manufacturers continued to expand in July as the Imports Index registered 53.5 percent, 2.5 percentage points higher than the 51 percent reported in June. This is the 23rd consecutive month of growth in imports.
The seven industries reporting growth in imports during the month of July — listed in order — are: Nonmetallic Mineral Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Computer & Electronic Products; and Chemical Products. The three industries reporting a decrease in imports during July are: Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Machinery. Eight industries reported no change in imports in July compared to June.
| Imports | % Reporting | %Higher | %Same | %Lower | Net | Index | |||||||||||||||
| Jul 2011 | 74 | 17 | 73 | 10 | +7 | 53.5 | |||||||||||||||
| Jun 2011 | 76 | 15 | 72 | 13 | +2 | 51.0 | |||||||||||||||
| May 2011 | 78 | 17 | 75 | 8 | +9 | 54.5 | |||||||||||||||
| Apr 2011 | 81 | 20 | 71 | 9 | +11 | 55.5 |
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(c) The Backlog of Orders, Prices, Customers’ Inventories, Imports and New Export Orders Indexes do not meet the accepted criteria for seasonal adjustments.
Buying Policy
Average commitment leadtime for Capital Expenditures increased 9 days to 112 days. Average leadtime for Production Materials increased 1 day to 55 days. Average leadtime for Maintenance, Repair and Operating (MRO) Supplies remained the same at 24 days.
| Percent Reporting | |||||||||||||||||||||
| Capital Expenditures | Hand-to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days | ||||||||||||||
| Jul 2011 | 30 | 9 | 10 | 15 | 23 | 13 | 112 | ||||||||||||||
| Jun 2011 | 30 | 10 | 13 | 13 | 24 | 10 | 103 | ||||||||||||||
| May 2011 | 30 | 9 | 11 | 16 | 24 | 10 | 104 | ||||||||||||||
| Apr 2011 | 28 | 6 | 16 | 16 | 23 | 11 | 108 |
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| Production Materials | Hand-to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days | ||||||||||||||
| Jul 2011 | 16 | 38 | 27 | 12 | 5 | 2 | 55 | ||||||||||||||
| Jun 2011 | 19 | 37 | 25 | 12 | 5 | 2 | 54 | ||||||||||||||
| May 2011 | 15 | 36 | 28 | 12 | 6 | 3 | 61 | ||||||||||||||
| Apr 2011 | 15 | 36 | 27 | 15 | 4 | 3 | 59 |
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| MRO Supplies | Hand-to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days | ||||||||||||||
| Jul 2011 | 44 | 43 | 9 | 4 | 0 | 0 | 24 | ||||||||||||||
| Jun 2011 | 44 | 43 | 10 | 3 | 0 | 0 | 24 | ||||||||||||||
| May 2011 | 46 | 37 | 13 | 2 | 1 | 1 | 28 | ||||||||||||||
| Apr 2011 | 44 | 43 | 12 | 1 | 0 | 0 | 23 |
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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 ManufacturingISM 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, New Orders, Production, Employment, Supplier Deliveries and Inventories) 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 is a composite index based on the seasonally adjusted diffusion indexes for five of the indicators with equal weights: New Orders, Production, Employment, Supplier Deliveries 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 reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI in excess of 42.5 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.5 percent, it is generally declining. The distance from 50 percent or 42.5 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.
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™. The Institute for Supply Management™, established in 1915, is the largest supply management organization in the world as well as one of the most respected. ISM’s mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education. 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 ManufacturingISM Report On Business®is posted on ISM’s Web site at www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next ManufacturingISM Report On Business® featuring the August 2011 data will be released at 10:00 a.m. (ET) on Thursday, September 1, 2011.