Economy
ISM PMI Hits 60.8 in September
Written by Sandy Williams
October 3, 2017
Manufacturing expanded in the United States, along with the overall economy, as the Institute for Supply Management’s September PMI jumped 2 percentage points to register 60.8 percent. ISM’s New Orders Index gained 4.3 points. New orders have averaged 61.6 percent since December 2016, said Timothy R. Fiore, chairman of ISM’s Manufacturing Business Survey Committee. Any reading above 50 percent indicates growth.
“Production remains at strong growth levels in most industries, in spite of weather conditions and supplier delivery constraints experienced during the period,” said Fiore. The Order Backlog Index increased 0.5 points to 58 percent.
Employment has been expanding since October 2016 and September’s increase of 0.4 percent was no exception. September’s Employment Index reading of 60.3 percent was the highest since June 2011.
Supplier deliveries slowed somewhat last month and the Raw Material Inventories Index declined 3 percentage points to 52.2. Customer inventories were considered too low in September, registering 42 percent and just 1.0 percent higher than August.
The Prices Index leapt 9.5 percentage points to a reading of 71.5. Fiore commented, “The Business Survey Committee noted price increases in many areas, including metals (steel and aluminum), food ingredients, electronic components, lumber and wood products, basic chemicals and plastics. The ongoing impacts from Hurricane Harvey are still largely unknown, and many respondents noted this uncertainty.”
Exports were up and imports down, according to the ISM survey. New Export Orders increased 1.5 points to 57 percent, while the Import Index decreased 0.5 of a point to 54 percent.
Survey participant comments:
- “Hurricanes causing supply chain and pricing issues.” (Chemical Products)
- “Business levels continue [to be] strong; usually by now, a seasonal downturn begins.” (Machinery)
- “Energy sector (oil and gas) continues to be strong. Price of oil appears to be beginning to stabilize.” (Computer & Electronic Products)
- “We’ve had a very good year and we are forecasting continued strong demand for our product in 2018.” (Miscellaneous Manufacturing)
- “Labor shortages continue to haunt operational capacity both at [the] local plant [level] and up and down the supply chain.”(Transportation Equipment)
- “Lumber prices starting to drop, and log prices starting to increase. Not the best combination.” (Wood Products)
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Fed Beige Book: Economy improves, but manufacturing weak
While general economic conditions across the US improved slightly over the last six weeks, activity in the manufacturing sector was weak, according to the Fed’s latest Beige Book report.
SMU Community Chat: Simonson with the latest on construction
A lot of economists were predicting a recession last year. Ken Simonson, chief economist for The Associated General Contractors of America (AGC), wasn’t one of them.
Housing starts slip to seven-month low in March
Following a strong February, US housing starts eased through March to a seven-month low, according to the most recent data from the US Census Bureau.
Manufacturing activity in New York state continues to soften
New York state saw a continued decline in manufacturing activity in April, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York
Worldsteel projects steel demand to grow 1.7% this year
Global steel demand will reach roughly 1.793 million metric tons (1.976 million short tons) this year, an increase of 1.7% over 2023, the World Steel Association (worldsteel) said in its updated Short Range Outlook report. The gain will come after a 0.5% contraction in steel demand in 2023. Demand is forecasted to increase another 1.2% […]