The Institute for Supply Management reports that the headline PMI figure from its manufacturing report on business was a reading of 55.7 in August. This is a slight increase from the 55.4 reading in July, and indicates economic expansion in the manufacturing sector (reading >50). This is also the highest the index has been since June 2011.
The August PMI figure was brought up mainly by increases in new orders. 4 of the 5 leading diffusion indexes from ISM now suggest economic expansion in the manufacturing sector:
- New Orders: 63.2 from 58.3 last month.
- Production: 62.4 from 65.0 last month.
- Employment: 53.3 from 54.4 last month.
- Deliveries: 52.3 from 52.1 last month.
- Inventories: 47.5 from 47.0 last month.
Performance by industry:
Of the 18 manufacturing industries, 15 are reporting growth in August in the following order: Textile Mills; Wood Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Printing & Related Support Activities; Furniture & Related Products; Primary Metals; Fabricated Metal Products; Transportation Equipment; Machinery; Chemical Products; and Paper Products. The only industry reporting contraction in August is Miscellaneous Manufacturing.
What the respondents are saying:
- “Slight improvements in both domestic and international sales.” (Fabricated Metal Products)
- “Business is slowing down, not sure why — but we may end up below last year’s sales levels, whereas we had forecast 6.5 percent growth.” (Miscellaneous Manufacturing)
- “Material prices continue to be favorable; business is steady.” (Paper Products)
- “Slowing down slightly, but still stronger than last year by 20 percent.” (Furniture & Related Products)
- “Military slowdown affecting business.” (Computer & Electronic Products)
- “Summer seasonal businesses are doing well after a late start.” (Printing & Related Support Activities)
- “Still not seeing the year we had expected. Cautious about the balance of 2013.” (Machinery)
- “Tight government spending still affecting business.” (Transportation Equipment)
- “With improved weather outlook in the central states, agricultural prices are relaxing year over year.” (Food, Beverage & Tobacco Products)
- “We have benefitted from the Yen; seeing a 20 percent decrease in material costs from 2012 to 2013.” (Chemical Products)