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PMI® at 59.3%; March Manufacturing ISM® Report On Business®New Orders, Production, and Employment Growing; Supplier Deliveries Slowing at Slower Rate; Backlog Same; Raw Materials Inventories Growing; Customers' Inventories Too Low; Prices Increasing at Faster Rate; Exports and Imports Growing TEMPE, Ariz., April 2, 2018 /PRNewswire/ -- Economic activity in the manufacturing sector expanded in March, and the overall economy grew for the 107th 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 March PMI® registered 59.3 percent, a decrease of 1.5 percentage points from the February reading of 60.8 percent. The New Orders Index registered 61.9 percent, a decrease of 2.3 percentage points from the February reading of 64.2 percent. The Production Index registered 61 percent, a 1 percentage point decrease compared to the February reading of 62 percent. The Employment Index registered 57.3 percent, a decrease of 2.4 percentage points from the February reading of 59.7 percent. The Supplier Deliveries Index registered 60.6 percent, a 0.5 percentage point decrease from the February reading of 61.1 percent. The Inventories Index registered 55.5 percent, a decrease of 1.2 percentage points from the February reading of 56.7 percent. The Prices Index registered 78.1 percent in March, a 3.9 percentage point increase from the February reading of 74.2 percent, indicating higher raw materials prices for the 25th consecutive month. Comments from the panel reflect continued expanding business strength. Demand remains robust, with the New Orders Index at 60 or above for the 11th straight month, and the Customers' Inventories Index at its lowest level since July 2011. The Backlog of Orders Index continued a 14 month expansion with its highest reading since May 2004, when it registered 63 percent. Consumption, described as production and employment, continues to expand, with indications that labor and skill shortages are affecting production output. Inputs, expressed as supplier deliveries, inventories and imports, were negatively impacted by weather conditions; Asian holidays; lead time extensions; steel and aluminum disruptions across many industries; supplier labor issues; and transportation difficulties due to driver and equipment shortages. Export orders remained strong, supported by a weaker U.S. currency. The Prices Index is at its highest level since April 2011, when it registered 82.6 percent. In March, price increases occurred across 17 of 18 industry sectors. Demand remains robust, but the nation's employment resources and supply chains are still struggling to keep up." Of the 18 manufacturing industries, 17 reported growth in March, in the following order: Fabricated Metal Products; Plastics & Rubber Products; Computer & Electronic Products; Paper Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Transportation Equipment; Petroleum & Coal Products; Wood Products; Machinery; Chemical Products; Textile Mills; Electrical Equipment, Appliances & Components; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Primary Metals. The only industry reporting a decrease during the period is Apparel, Leather & Allied Products. WHAT RESPONDENTS ARE SAYING
Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes. COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY Commodities Up in Price Commodities Down in Price Commodities in Short Supply The number of consecutive months the commodity is listed is indicated after each item. MARCH 2018 MANUFACTURING INDEX SUMMARIES PMI® A PMI® above 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the March PMI® indicates growth for the 107th consecutive month in the overall economy and the 19th straight month of growth in the manufacturing sector. "The past relationship between the PMI® and the overall economy indicates that the PMI® for March (59.3 percent) corresponds to a 4.9 percent increase in real gross domestic product (GDP) on an annualized basis." THE LAST 12 MONTHS
New Orders Fifteen of 18 industries reported growth in new orders in March, listed in the following order: Wood Products; Nonmetallic Mineral Products; Computer & Electronic Products; Paper Products; Transportation Equipment; Plastics & Rubber Products; Chemical Products; Printing & Related Support Activities; Fabricated Metal Products; Primary Metals; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; and Machinery. The only industry reporting a decrease in new orders in March compared to February is Apparel, Leather & Allied Products.
Production The 14 industries reporting growth in production during the month of March — listed in order — are: Printing & Related Support Activities; Plastics & Rubber Products; Paper Products; Computer & Electronic Products; Fabricated Metal Products; Transportation Equipment; Petroleum & Coal Products; Chemical Products; Primary Metals; Machinery; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing. The two industries reporting a decrease in production in March compared to February are: Apparel, Leather & Allied Products; and Textile Mills.
Employment Of the 18 manufacturing industries, the 12 reporting employment growth in March — listed in order — are: Paper Products; Furniture & Related Products; Textile Mills; Miscellaneous Manufacturing; Fabricated Metal Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Machinery; Transportation Equipment; Computer & Electronic Products; Plastics & Rubber Products; and Chemical Products. The only industry reporting a decrease in employment in March compared to February is Food, Beverage & Tobacco Products.
Supplier Deliveries The 13 industries reporting slower supplier deliveries in March — listed in order — are: Textile Mills; Machinery; Fabricated Metal Products; Nonmetallic Mineral Products; Computer & Electronic Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Chemical Products; Plastics & Rubber Products; Petroleum & Coal Products; Transportation Equipment; and Paper Products. The only industry reporting faster supplier deliveries in March compared to February is Primary Metals.
Inventories* The nine industries reporting higher inventories in March — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Printing & Related Support Activities; Fabricated Metal Products; Transportation Equipment; Nonmetallic Mineral Products; Petroleum & Coal Products; Computer & Electronic Products; and Chemical Products. The two industries reporting lower inventories in March are: Primary Metals; and Paper Products. Seven industries reported no change in raw materials inventories in March compared to February.
Customers' Inventories* The only manufacturing industry reporting customers' inventories as too high during the month of March is Miscellaneous Manufacturing. The 10 industries reporting customers' inventories as too low during March — listed in order — are: Wood Products; Primary Metals; Machinery; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Plastics & Rubber Products; Paper Products; Transportation Equipment; Fabricated Metal Products; and Chemical Products. Seven industries reported no change in customers' inventories in March compared to February.
Prices* Seventeen industries reported paying increased prices for raw materials in March, in the following order: Apparel, Leather & Allied Products; Textile Mills; Furniture & Related Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Machinery; Paper Products; Plastics & Rubber Products; Chemical Products; Primary Metals; Transportation Equipment; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Computer & Electronic Products; Printing & Related Support Activities; and Petroleum & Coal Products. No industry reported a decrease in prices in March compared to February.
Backlog of Orders* The 11 industries reporting growth in order backlogs in March — listed in order — are: Wood Products; Textile Mills; Nonmetallic Mineral Products; Paper Products; Computer & Electronic Products; Fabricated Metal Products; Transportation Equipment; Machinery; Chemical Products; Primary Metals; and Plastics & Rubber Products. The three industries reporting a decrease in order backlogs during March are: Petroleum & Coal Products; Furniture & Related Products; and Food, Beverage & Tobacco Products.
New Export Orders* The 11 industries reporting growth in new export orders in March — listed in order — are: Wood Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Chemical Products; Machinery; Transportation Equipment; Computer & Electronic Products; Fabricated Metal Products; and Miscellaneous Manufacturing. The two industries reporting a decrease in new export orders in March are Primary Metals; and Plastics & Rubber Products.
Imports* The 12 industries reporting growth in imports during the month of March — listed in order — are: Nonmetallic Mineral Products; Petroleum & Coal Products; Computer & Electronic Products; Printing & Related Support Activities; Transportation Equipment; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Chemical Products; Miscellaneous Manufacturing; Machinery; and Plastics & Rubber Products. The four industries that reported a decrease in imports during March compared to February are: Furniture & Related Products; Apparel, Leather & Allied Products; Primary Metals; and Paper Products.
*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 43.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.2 percent, it is generally declining. The distance from 50 percent or 43.2 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. 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 Capital Expenditures; Production Materials; 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. ISM ROB Content Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, datastreams, timeseries variables, fonts, icons, link buttons, wallpaper, desktop themes, on-line postcards, montages, mash-ups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. 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