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PMI® at 60.8%; September Manufacturing ISM® Report On Business®New Orders, Production, Backlog of Orders and Employment Continue Growing; Supplier Deliveries Slowing; Raw Materials Inventories Growing, Customers' Inventories Too Low; Prices Increasing at Faster Rate TEMPE, Ariz., Oct. 2, 2017 /PRNewswire/ -- Economic activity in the manufacturing sector expanded in September, and the overall economy grew for the 100th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: "The September PMI® registered 60.8 percent, an increase of 2 percentage points from the August reading of 58.8 percent. The New Orders Index registered 64.6 percent, an increase of 4.3 percentage points from the August reading of 60.3 percent. The Production Index registered 62.2 percent, a 1.2 percentage point increase compared to the August reading of 61 percent. The Employment Index registered 60.3 percent, an increase of 0.4 percentage point from the August reading of 59.9 percent. The Supplier Deliveries Index registered 64.4 percent, a 7.3 percentage point increase from the August reading of 57.1 percent. The Inventories Index registered 52.5 percent, a decrease of 3 percentage points from the August reading of 55.5 percent. The Prices Index registered 71.5 percent in September, a 9.5 percentage point increase from the August level of 62, indicating higher raw materials prices for the 19th consecutive month. Comments from the panel reflect expanding business conditions, with new orders, production, employment, order backlogs and export orders all growing in September; as well as, supplier deliveries slowing (improving) and inventories growing at a slower rate during the period. The Customers' Inventories Index remains at low levels." Of the 18 manufacturing industries, 17 reported growth in September, in the following order: Textile Mills; Machinery; Nonmetallic Mineral Products; Transportation Equipment; Plastics & Rubber Products; Paper Products; Wood Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; Petroleum & Coal Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; and Primary Metals. One industry, Furniture & Related Products, reported contraction in September compared to August. WHAT RESPONDENTS ARE SAYING …
Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes. *Number of months moving in current direction. COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY Commodities Up in Price Commodities Down in Price Commodities in Short Supply Note: The number of consecutive months the commodity is listed is indicated after each item. SEPTEMBER 2017 MANUFACTURING INDEX SUMMARIES PMI® A PMI® above 43.3 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the September PMI® indicates growth for the 100th consecutive month in the overall economy and the 13th straight month of growth in the manufacturing sector. Fiore says, "The past relationship between the PMI® and the overall economy indicates that the average PMI® for January through September (57.1 percent) corresponds to a 4.4 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI® for September (60.8 percent) is annualized, it corresponds to a 5.5 percent increase in real GDP annually." THE LAST 12 MONTHS
New Orders Fourteen of 18 industries reported growth in new orders in September, listed in the following order: Apparel, Leather & Allied Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Paper Products; Chemical Products; Transportation Equipment; Machinery; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Computer & Electronic Products; Primary Metals; Fabricated Metal Products; and Electrical Equipment, Appliances & Components. Three industries — Textile Mills; Furniture & Related Products; and Printing & Related Support Activities — reported a decrease in new orders in September compared to August.
Production The 13 industries reporting growth in production during the month of September — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Wood Products; Nonmetallic Mineral Products; Machinery; Transportation Equipment; Chemical Products; Computer & Electronic Products; Miscellaneous Manufacturing; Fabricated Metal Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; and Paper Products. Two industries — Furniture & Related Products; and Petroleum & Coal Products — reported a decrease in production in September compared to August.
Employment Of the 18 manufacturing industries, the 13 reporting employment growth in September — listed in order — are: Textile Mills; Wood Products; Machinery; Paper Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Fabricated Metal Products; Plastics & Rubber Products; Primary Metals; Transportation Equipment; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Petroleum & Coal Products. The three industries reporting a decrease in employment in September are: Apparel, Leather & Allied Products; Chemical Products; and Electrical Equipment, Appliances & Components.
Supplier Deliveries The 14 industries reporting slower supplier deliveries in September — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Paper Products; Machinery; Plastics & Rubber Products; Petroleum & Coal Products; Chemical Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Computer & Electronic Products; Fabricated Metal Products; and Transportation Equipment. One industry, Furniture & Related Products, reported faster deliveries in September compared to August.
Inventories* The nine industries reporting higher inventories in September — listed in order — are: Textile Mills; Furniture & Related Products; Transportation Equipment; Computer & Electronic Products; Machinery; Plastics & Rubber Products; Miscellaneous Manufacturing; Fabricated Metal Products; and Petroleum & Coal Products. The six industries reporting lower inventories in September — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Nonmetallic Mineral Products; Chemical Products; Paper Products; and Electrical Equipment, Appliances & Components.
Customers' Inventories* Two manufacturing industries — Nonmetallic Mineral Products; and Furniture & Related Products — reported customers' inventories as being too high during the month of September. The 10 industries reporting customers' inventories as too low during September — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Primary Metals; Wood Products; Transportation Equipment; Plastics & Rubber Products; Chemical Products; Machinery; Fabricated Metal Products; and Computer & Electronic Products. Six industries reported no change in customer inventories in September compared to August.
Prices* All 18 industries reported paying increased prices for raw materials in September, in the following order: Textile Mills; Furniture & Related Products; Paper Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Wood Products; Electrical Equipment, Appliances & Components; Chemical Products; Fabricated Metal Products; Nonmetallic Mineral Products; Petroleum & Coal Products; Transportation Equipment; Primary Metals; Machinery; Miscellaneous Manufacturing; Computer & Electronic Products; and Printing & Related Support Activities.
Backlog of Orders* The 12 industries reporting growth in order backlogs in September — listed in order — are: Apparel, Leather & Allied Products; Paper Products; Plastics & Rubber Products; Fabricated Metal Products; Computer & Electronic Products; Chemical Products; Machinery; Petroleum & Coal Products; Miscellaneous Manufacturing; Transportation Equipment; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The two industries reporting a decrease in order backlogs during September are: Textile Mills; and Furniture & Related Products.
New Export Orders* The nine industries reporting growth in new export orders in September — listed in order — are: Chemical Products; Food, Beverage & Tobacco Products; Machinery; Fabricated Metal Products; Paper Products; Transportation Equipment; Miscellaneous Manufacturing; Plastics & Rubber Products; and Computer & Electronic Products. Two industries — Nonmetallic Mineral Products; and Printing & Related Support Activities — reported a decrease in new export orders. Seven industries reported no change in export orders in September compared to August.
Imports* The eight industries reporting growth in imports during the month of September — listed in order — are: Transportation Equipment; Furniture & Related Products; Plastics & Rubber Products; Computer & Electronic Products; Chemical Products; Miscellaneous Manufacturing; Machinery; and Fabricated Metal Products. Four industries — Primary Metals; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products — reported a decrease in imports during September compared to August.
*The Inventories, Customers' Inventories, Prices, Backlog of Orders, New Export Orders and Imports Indexes do not meet the accepted criteria for seasonal adjustments. Buying Policy
About This Report The data presented herein is obtained from a survey of manufacturing supply executives 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. The data should be compared to all other economic data sources when used in decision-making. Data and Method of Presentation 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 and Supplier Deliveries) 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 subject annually to relatively minor changes when conditions warrant them. The PMI® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), 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® above 43.3 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.3 percent, it is generally declining. The distance from 50 percent or 43.3 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 Manufacturing ISM® Report On Business® survey is 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 report for release on the first business day of the following month. The industries reporting growth, as indicated in the Manufacturing ISM® Report On Business® monthly report, 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. 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