Economy

ISM PMI Indicates Continued Economic Expansion

December 2, 2017

The November ISM PMI registered 58.2 percent, a decrease of 0.5 percentage point from the October reading of 58.7 percent. “This indicates growth in manufacturing for the 15th consecutive month led by expansion in new orders and production, offset by supplier delivery improvement and declines in raw material inventory,” said Timothy R. Fiore, chairman of the Institute for Supply Management Manufacturing Business Survey Committee.

New orders and production both accelerated in November, up 0.6 points to 64 percent and 2.9 points to 63.9 percent, respectively. Raw material inventories contracted in November to 47 percent as suppliers continued to have difficulty meeting production schedules. Customer inventories were 2.0 percent higher at an index reading of 45.5 percent. Backlogs registered no change at 55 percent

The export orders index was a strong 56 percent despite a 0.5 percent decline during the month. “All six big industry sectors continued to expand export activity during the period,” said Fiore. Fabricated metal products was the only industry to report a decrease in new export orders.

Survey respondents had the following comments:

“Strong sales through third and now fourth quarters. Backlog increasing, and capacity at suppliers tightening.” (Machinery)
“We are just coming off a record sales year. We expect to continue in 2018 robust activity.” (Miscellaneous Manufacturing)
“We are seeing steady, consistent demand for end of year. We usually see a slowdown, which we haven’t seen yet.” (Fabricated Metal Products)
“Continuing to see more orders for the next six to 12 months.” (Chemical Products)
“Overall industry demand remains strong. Continue to have a healthy backlog of orders. Local economy is also strong, with a fairly tight labor market.” (Transportation Equipment)