Manufacturing ISM Report On Business®, February 2013

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Manufacturing ISM Report On Business®, February 2013

National report (USA), released by ISM on March 1, 2013.

The report was issued on March 1by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee.

“The PMI™ registered 54.2 percent, an increase of 1.1 percentage points from January’s reading of 53.1 percent, indicating expansion in manufacturing for the third consecutive month. This month’s reading reflects the highest PMI™ since June 2011, when the index registered 55.8 percent.

The New Orders Index registered 57.8 percent, an increase of 4.5 percent over January’s reading of 53.3 percent, indicating growth in new orders for the second consecutive month.

As was the case in January, all five of the PMI™’s component indexes — new orders, production, employment, supplier deliveries and inventories — registered in positive territory in February. In addition, the Backlog of Orders, Exports and Imports Indexes all grew in February relative to January.”

PERFORMANCE BY INDUSTRY

Of the 18 manufacturing industries, 15 are reporting growth in February in the following order: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Paper Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Fabricated Metal Products; Furniture & Related Products; Petroleum & Coal Products; Wood Products; Printing & Related Support Activities; Transportation Equipment; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Machinery; and Primary Metals.

The three industries reporting contraction in February are: Textile Mills; Computer & Electronic Products; and Chemical Products.

WHAT RESPONDENTS ARE SAYING …

  • “Automotive is still going strong, which allows budgeting for capital equipment.” (Machinery)
  • “Overall business is good.” (Food, Beverage & Tobacco Products)
    “Starting to pick up after a slower than normal year-end.” (Miscellaneous Manufacturing)
  • “Continuing slowdown in defense spending.” (Computer & Electronic Products)
  • “More RFQs coming in than the past three months.” (Nonmetallic Mineral Products)
  • “Workload is growing; need qualified machinists.” (Fabricated Metal Products)
  • “Europe is still a concern in the auto sector.” (Transportation Equipment)
  • “Business seems to be on an uptick. The normal seasonal downturn for us has been much shorter and not as severe as in the past four years.” (Furniture & Related Products)
  • “Demand indicators are robust. Supply is constrained. Pricing is escalating.” (Wood Products)
  • “Customer demand has softened. At first, that decline was consistent with seasonal patterns but has persisted beyond historical periods.” (Chemical Prod

PMI (Purchasing Managers Index) March 2013

Manufacturing expanded in February as the PMI™ registered 54.2 percent, an increase of 1.1 percentage points when compared to January’s reading of 53.1 percent. This month’s reading reflects the highest PMI™ since June 2011, when the index registered 55.8 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 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the February PMI™ indicates growth for the 45th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the third consecutive month. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January and February (53.7 percent) corresponds to a 3.6 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for February (54.2 percent) is annualized, it corresponds to a 3.7 percent increase in real GDP annually.”

Read the full Manufacturing ISM Report On Business…

The data presented in the Manufacturing ISM Report On Business®, 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. View the Manufacturing ISM Report On Business® »

About the Manufacturing ISM Report On Business

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 Manufacturing ISM 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.