ISM October 2011 Report
Economic activity in the manufacturing sector expanded in October for the 27th consecutive month, and the overall economy grew for the 29th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
“Overall industry volumes remain flat vs. previous month. Uncertainty in supply chain is increasing due to lower volumes vs. historical.”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 50.8 percent, a decrease of 0.8 percentage point from September’s reading of 51.6 percent, indicating expansion in the manufacturing sector for the 27th consecutive month. The New Orders Index increased 2.8 percentage points from September to 52.4 percent, indicating a return to growth after three months of contraction. The Prices Index, at 41 percent, dropped 15 percentage points, and is below the 50 percent mark for the first time since May 2009 when it registered 43.5 percent. Inventories decreased to 46.7 percent, which is 5.3 percentage points below the September reading of 52 percent. Comments from respondents are mixed, indicating positive relief from raw materials pricing and continuing strength in a few industries, but there is also more concern and caution about growth in this uncertain economy.”
PERFORMANCE BY INDUSTRY
Of the 18 manufacturing industries, eight are reporting growth in October, in the following order: Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Paper Products; and Machinery. The six industries reporting contraction in October — listed in order — are: Plastics & Rubber Products; Chemical Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing.
WHAT RESPONDENTS ARE SAYING …
- “Starting to see some deflation on raw materials.” (Chemical Products)
- “Overall industry volumes remain flat vs. previous month. Uncertainty in supply chain is increasing due to lower volumes vs. historical.” (Electrical Equipment, Appliances & Components)
- “International: contraction in demand for our products is driving mitigation of excess material on order. Contract manufacturers are adjusting their resources accordingly.” (Machinery)
- “Business is very strong, both domestically and internationally.” (Fabricated Metal Products)
- “With metal prices declining, we are seeing some short-term forecast strength. If metal pricing increases again, this strength is expected to disappear again.” (Primary Metals)
- “Auto industry still strong.” (Transportation Equipment)
- “Business is slowing — not crashing — but uncertainty and caution is the order of the day.” (Plastics & Rubber Products)
- “Retail branded business is slower than expected due to consumers continuing to move to private label- and store-brand products for price advantage. Raw material supplies are in good shape, but prices are staying stubbornly higher than expected.” (Food, Beverage & Tobacco Products)
| MANUFACTURING AT A GLANCE OCTOBER 2011 | ||||||||||||||||||
| Index | Series Index Oct | Series Index Sep | Percentage Point Change | Direction | Rate of Change | Trend(a) (Months) | ||||||||||||
| PMI | 50.8 | 51.6 | -0.8 | Growing | Slower | 27 | ||||||||||||
| New Orders | 52.4 | 49.6 | +2.8 | Growing | From Contacting | 1 | ||||||||||||
| Production | 50.1 | 51.2 | -1.1 | Growing | Slower | 2 | ||||||||||||
| Employment | 53.5 | 53.8 | -0.3 | Growing | Slower | 25 | ||||||||||||
| Supplier Deliveries | 51.3 | 51.4 | -0.1 | Slowing | Slower | 29 | ||||||||||||
| Inventories | 46.7 | 52.0 | -5.3 | Contracting | From Growing | 1 | ||||||||||||
| Customers’ Inventories | 43.5 | 49.0 | -5.5 | Too Low | Faster | 31 | ||||||||||||
| Prices | 41.0 | 56.0 | -15.0 | Decreasing | From Increasing | 1 | ||||||||||||
| Backlog of Orders | 47.5 | 41.5 | +6.0 | Contracting | Slower | 5 | ||||||||||||
| Exports | 50.0 | 53.5 | -3.5 | Unchanged | From Growing | 1 | ||||||||||||
| Imports | 49.5 | 54.5 | -5.0 | Contracting | From Growing | 1 | ||||||||||||
| OVERALL ECONOMY Manufacturing Sector | Growing | Slower | 29 | |||||||||||||||
| Growing | Slower | 27 |
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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 Products(b) (3); Caustic Soda; Copper(b); Steel(b) (14); and Titanium Dioxide (2).
Commodities Down in Price
Alloy Metals; Aluminum (2); Aluminum Products(b) (2); Copper(b) (3); Copper Based Products; Corn; Diesel Fuel; Natural Gas (3); Nickel; Plastic Resins (3); Steel(b) (6); and Steel Products.
Commodities in Short Supply
Castings (2) is the only commodity reported in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.
(b) Reported as both up and down in price.
OCTOBER 2011 MANUFACTURING INDEX SUMMARIES
PMI
Manufacturing continued its growth in October as the PMI registered 50.8 percent, a decrease of 0.8 percentage point when compared to September’s reading of 51.6 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 29th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 27th consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economyindicates that the average PMI for January through October (55.7 percent) corresponds to a 4.6 percent increase in real gross domestic product (GDP). In addition, if the PMI for October (50.8 percent) is annualized, it corresponds to a 2.9 percent increase in real GDP annually.”
THE LAST 12 MONTHS
| Month | PMI | Month | PMI | |||||||||||||||||||||||||
| Oct 2011 | 50.8 | Apr 2011 | 60.4 | |||||||||||||||||||||||||
| Sep 2011 | 51.6 | Mar 2011 | 61.2 | |||||||||||||||||||||||||
| Aug 2011 | 50.6 | Feb 2011 | 61.4 | |||||||||||||||||||||||||
| Jul 2011 | 50.9 | Jan 2011 | 60.8 | |||||||||||||||||||||||||
| Jun 2011 | 55.3 | Dec 2010 | 58.5 | |||||||||||||||||||||||||
| May 2011 | 53.5 | Nov 2010 | 58.2 | |||||||||||||||||||||||||
| Average for 12 months – 56.1 High – 61.4 Low – 50.6 |
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New Orders
ISM’s New Orders Index registered 52.4 percent in October, which is an increase of 2.8 percentage points when compared to the September reading of 49.6 percent, and represents a return to growth after three consecutive months of contraction. 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 eight industries reporting growth in new orders in October — listed in order — are: Petroleum & Coal Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Primary Metals; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing. The nine industries reporting decreases in new orders in October — listed in order — are: Wood Products; Textile Mills; Chemical Products; Furniture & Related Products; Printing & Related Support Activities; Paper Products; Transportation Equipment; Machinery; and Apparel, Leather & Allied Products.
| New Orders | %Better | %Same | %Worse | Net | Index | |||||||||||||||||||||
| Oct 2011 | 22 | 53 | 25 | -3 | 52.4 | |||||||||||||||||||||
| Sep 2011 | 23 | 53 | 24 | -1 | 49.6 | |||||||||||||||||||||
| Aug 2011 | 22 | 53 | 25 | -3 | 49.6 | |||||||||||||||||||||
| Jul 2011 | 24 | 53 | 23 | +1 | 49.2 |
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Production
ISM’s Production Index registered 50.1 percent in October, which is a decrease of 1.1 percentage points when compared to the September reading of 51.2 percent, and indicates growth for the second consecutive month. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The eight industries reporting growth in production during the month of October — listed in order — are: Wood Products; Primary Metals; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Paper Products; Computer & Electronic Products; and Miscellaneous Manufacturing. The nine industries reporting a decrease in production in October — listed in order — are: Plastics & Rubber Products; Textile Mills; Furniture & Related Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Chemical Products; Transportation Equipment; Machinery; and Apparel, Leather & Allied Products.
| Production | %Better | %Same | %Worse | Net | Index | |||||||||||||||||||||
| Oct 2011 | 21 | 59 | 20 | +1 | 50.1 | |||||||||||||||||||||
| Sep 2011 | 23 | 56 | 21 | +2 | 51.2 | |||||||||||||||||||||
| Aug 2011 | 19 | 62 | 19 | 0 | 48.6 | |||||||||||||||||||||
| Jul 2011 | 22 | 60 | 18 | +4 | 52.3 |
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Employment
ISM’s Employment Index registered 53.5 percent in October, which is 0.3 percentage point lower than the 53.8 percent reported in September. This is the 25th consecutive month the Employment Index has been above 50 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, eight reported growth in employment in October in the following order: Textile Mills; Primary Metals; Fabricated Metal Products; Petroleum & Coal Products; Transportation Equipment; Paper Products; Machinery; and Computer & Electronic Products. The six industries reporting a decrease in employment in October — listed in order — are: Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Chemical Products; Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products.
| Employment | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
| Oct 2011 | 22 | 63 | 15 | +7 | 53.5 | |||||||||||||||||||||
| Sep 2011 | 22 | 62 | 16 | +6 | 53.8 | |||||||||||||||||||||
| Aug 2011 | 22 | 63 | 15 | +7 | 51.8 | |||||||||||||||||||||
| Jul 2011 | 24 | 63 | 13 | +11 | 53.5 |
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Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was slower in October as the Supplier Deliveries Index registered 51.3 percent, which is 0.1 percentage point lower than the 51.4 percent registered in September. This is the 29th consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.
The five industries reporting slower supplier deliveries in October are: Furniture & Related Products; Computer & Electronic Products; Transportation Equipment; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The five industries reporting faster deliveries in October are: Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Chemical Products; and Machinery. Eight industries reported no change in supplier deliveries in October compared to September.
| Supplier Deliveries | %Slower | %Same | %Faster | Net | Index | |||||||||||||||||||||
| Oct 2011 | 10 | 81 | 9 | +1 | 51.3 | |||||||||||||||||||||
| Sep 2011 | 12 | 81 | 7 | +5 | 51.4 | |||||||||||||||||||||
| Aug 2011 | 12 | 81 | 7 | +5 | 50.6 | |||||||||||||||||||||
| Jul 2011 | 13 | 80 | 7 | +6 | 50.4 |
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Inventories
The Inventories Index registered 46.7 percent in October, 5.3 percentage points lower than the 52 percent reported in September. 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 five industries reporting higher inventories in October are: Textile Mills; Furniture & Related Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Machinery. The 11 industries reporting decreases in inventories in October — listed in order — are: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Primary Metals; Chemical Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Transportation Equipment; Fabricated Metal Products; Plastics & Rubber Products; and Paper Products.
| Inventories | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
| Oct 2011 | 17 | 59 | 24 | -7 | 46.7 | |||||||||||||||||||||
| Sep 2011 | 23 | 58 | 19 | +4 | 52.0 | |||||||||||||||||||||
| Aug 2011 | 23 | 63 | 14 | +9 | 52.3 | |||||||||||||||||||||
| Jul 2011 | 18 | 60 | 22 | -4 | 49.3 |
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Customers’ Inventories(c)
The ISM Customers’ Inventories Index registered 43.5 percent in October, 5.5 percentage points lower than in September when the index registered 49 percent. This is the 31st 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 five manufacturing industries reporting customers’ inventories as being too high during October are: Apparel, Leather & Allied Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Chemical Products. The 11 industries reporting customers’ inventories as too low during October — listed in order — are: Primary Metals; Nonmetallic Mineral Products; Petroleum & Coal Products; Textile Mills; Miscellaneous Manufacturing; Plastics & Rubber Products; Transportation Equipment; Machinery; Paper Products; Computer & Electronic Products; and Fabricated Metal Products.
| Customers’ Inventories | % Reporting | %Too High | %About Right | %Too Low | Net | Index | |||||||||||||||
| Oct 2011 | 71 | 12 | 63 | 25 | -13 | 43.5 | |||||||||||||||
| Sep 2011 | 73 | 17 | 64 | 19 | -2 | 49.0 | |||||||||||||||
| Aug 2011 | 73 | 15 | 63 | 22 | -7 | 46.5 | |||||||||||||||
| Jul 2011 | 72 | 11 | 66 | 23 | -12 | 44.0 |
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Prices(c)
The ISM Prices Index registered 41 percent in October, 15 percentage points lower than the 56 percent reported in September. This is the sixth consecutive month the Prices Index has registered below 80 percent since December 2010, and is the first month of contraction since May 2009 when the index registered 43.5 percent. The last time the Prices Index decreased more than 15 percentage points was in June 2010, when it registered 57 percent compared to the prior month’s reading of 77.5 percent. In October, 14 percent of respondents reported paying higher prices, 32 percent reported paying lower prices and 54 percent of supply executives reported paying the same prices as in September. 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, only two report paying increased prices during the month of October: Furniture & Related Products; and Computer & Electronic Products. The 13 industries reporting paying lower prices on average during the month of October — listed in order — are: Plastics & Rubber Products; Primary Metals; Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Transportation Equipment; Food, Beverage & Tobacco Products; Machinery; Petroleum & Coal Products; Printing & Related Support Activities; Chemical Products; Paper Products; Miscellaneous Manufacturing; and Fabricated Metal Products.
| Prices | %Higher | %Same | %Lower | Net | Index | |||||||||||||||||||||
| Oct 2011 | 14 | 54 | 32 | -18 | 41.0 | |||||||||||||||||||||
| Sep 2011 | 26 | 60 | 14 | +12 | 56.0 | |||||||||||||||||||||
| Aug 2011 | 29 | 53 | 18 | +11 | 55.5 | |||||||||||||||||||||
| Jul 2011 | 35 | 48 | 17 | +18 | 59.0 |
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Backlog of Orders(c)
ISM’s Backlog of Orders Index registered 47.5 percent in October, which is 6 percentage points higher than the 41.5 percent reported in September. Of the 82 percent of respondents who reported their backlog of orders, 19 percent reported greater backlogs, 24 percent reported smaller backlogs, and 57 percent reported no change from September.
The two industries reporting increased order backlogs in October are: Plastics & Rubber Products; and Electrical Equipment, Appliances & Components. The eight industries reporting decreases in order backlogs during October — listed in order — are: Furniture & Related Products; Paper Products; Miscellaneous Manufacturing; Transportation Equipment; Machinery; Chemical Products; Fabricated Metal Products; and Apparel, Leather & Allied Products. Seven industries reported no change in backlog of orders in October compared to September.
| Backlog of Orders | % Reporting | %Greater | %Same | %Less | Net | Index | |||||||||||||||
| Oct 2011 | 82 | 19 | 57 | 24 | -5 | 47.5 | |||||||||||||||
| Sep 2011 | 86 | 15 | 53 | 32 | -17 | 41.5 | |||||||||||||||
| Aug 2011 | 86 | 15 | 62 | 23 | -8 | 46.0 | |||||||||||||||
| Jul 2011 | 81 | 16 | 58 | 26 | -10 | 45.0 |
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New Export Orders(c)
ISM’s New Export Orders Index registered 50 percent in October, which is 3.5 percentage points lower than the 53.5 percent reported in September. This indicates exports were unchanged from September, and follows 28 consecutive months of growth in the New Export Orders Index.
The five industries reporting growth in new export orders in October are: Plastics & Rubber Products; Fabricated Metal Products; Miscellaneous Manufacturing; Computer & Electronic Products; and Chemical Products. The five industries reporting a decrease in new export orders during October are: Furniture & Related Products; Paper Products; Machinery; Food, Beverage & Tobacco Products; and Primary Metals. Eight industries reported no change in exports in October compared to September.
| New Export Orders | % Reporting | %Higher | %Same | %Lower | Net | Index | |||||||||||||||
| Oct 2011 | 76 | 14 | 72 | 14 | 0 | 50.0 | |||||||||||||||
| Sep 2011 | 78 | 18 | 71 | 11 | +7 | 53.5 | |||||||||||||||
| Aug 2011 | 76 | 16 | 69 | 15 | +1 | 50.5 | |||||||||||||||
| Jul 2011 | 77 | 19 | 70 | 11 | +8 | 54.0 |
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Imports(c)
ISM’s Imports Index registered 49.5 percent in October, which is 5 percentage points lower than the 54.5 percent reported in September. This is the first month of contraction in the index following 25 consecutive months of growth.
The five industries reporting growth in imports during the month of October are: Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Fabricated Metal Products; and Miscellaneous Manufacturing. The eight industries reporting a decrease in imports during October — listed in order — are: Primary Metals; Textile Mills; Computer & Electronic Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Machinery; Chemical Products; and Apparel, Leather & Allied Products.
| Imports | % Reporting | %Higher | %Same | %Lower | Net | Index | |||||||||||||||
| Oct 2011 | 75 | 13 | 73 | 14 | -1 | 49.5 | |||||||||||||||
| Sep 2011 | 80 | 19 | 71 | 10 | +9 | 54.5 | |||||||||||||||
| Aug 2011 | 77 | 18 | 75 | 7 | +11 | 55.5 | |||||||||||||||
| Jul 2011 | 74 | 17 | 73 | 10 | +7 | 53.5 |
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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 decreased 4 days to 113 days. Average leadtime for Production Materials decreased 2 days to 55 days. Average leadtime for Maintenance, Repair and Operating (MRO) Supplies decreased 1 day to 25 days.
| Percent Reporting | |||||||||||||||||||||||
| Capital Expenditures | Hand-to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days | ||||||||||||||||
| Oct 2011 | 24 | 8 | 11 | 22 | 24 | 11 | 113 | ||||||||||||||||
| Sep 2011 | 22 | 10 | 14 | 16 | 26 | 12 | 117 | ||||||||||||||||
| Aug 2011 | 28 | 8 | 8 | 19 | 25 | 12 | 114 | ||||||||||||||||
| Jul 2011 | 30 | 9 | 10 | 15 | 23 | 13 | 112 |
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| Production Materials | Hand-to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days | ||||||||||||||||
| Oct 2011 | 16 | 39 | 25 | 13 | 5 | 2 | 55 | ||||||||||||||||
| Sep 2011 | 15 | 37 | 28 | 13 | 5 | 2 | 57 | ||||||||||||||||
| Aug 2011 | 14 | 46 | 22 | 13 | 3 | 2 | 52 | ||||||||||||||||
| Jul 2011 | 16 | 38 | 27 | 12 | 5 | 2 | 55 |
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| MRO Supplies | Hand-to- Mouth | 30 Days | 60 Days | 90 Days | 6 Months | 1 Year+ | Average Days | ||||||||||||||||
| Oct 2011 | 44 | 40 | 12 | 4 | 0 | 0 | 25 | ||||||||||||||||
| Sep 2011 | 43 | 37 | 16 | 4 | 0 | 0 | 26 | ||||||||||||||||
| Aug 2011 | 45 | 39 | 12 | 3 | 1 | 0 | 26 | ||||||||||||||||
| Jul 2011 | 44 | 43 | 9 | 4 | 0 | 0 | 24 |
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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.
The ManufacturingISM Report On Business® surveys are sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM then compiles the reports for release on the first business day of the following month.
The industries reporting growth, as indicated in the ManufacturingISM Report On Business® monthly reports, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.
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 November 2011 data will be released at 10:00 a.m. (ET) on Thursday, December 1, 2011.