Monday, May 2, 2011

ISM Manufacturing Still Strong at 60.4, Pricing Pressures Continue

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ISM Manufacturing continues to show healthy expansion, although down a bit from previous months.  (Any reading over 50 is expansionary) Some of that slowdown might be blamed on the situation in Japan.  Consensus for this month was a slowdown to 59.5, so the 60.4 was "better than expected".  Pricing pressure continues in the supply chain. While manufacturing is only about 11% of U.S. output, and 9% of employment, this has been an area of strength during the past few years.

Original source:

WHAT RESPONDENTS ARE SAYING ...
  • "Rapidly rising raw material costs putting extreme pressure on profits." (Food, Beverage & Tobacco Products)
  • "Plastic resin product prices are climbing so fast that [suppliers] are attempting to increase prices on orders already accepted but not [yet] delivered." (Chemical Products)
  • "Customers are rebuilding safety stock levels of inventory, and also trying to buy ahead of material price increases." (Plastics & Rubber Products)
  • "Market continues to get stronger month over month. Recovery is faster than anticipated." (Transportation Equipment)
  • "Pressure from offshore suppliers continues to mount with exchange rate increases and seasonal demand for capacity." (Miscellaneous Manufacturing)
MANUFACTURING AT A GLANCE
APRIL 2011


Index
Series
Index
April
Series
Index
March
Percentage
Point
Change


Direction
Rate
of
Change

Trend*
(Months)
PMI 60.4 61.2 -0.8 Growing Slower 21
New Orders 61.7 63.3 -1.6 Growing Slower 22
Production 63.8 69.0 -5.2 Growing Slower 23
Employment 62.7 63.0 -0.3 Growing Slower 19
Supplier Deliveries 60.2 63.1 -2.9 Slowing Slower 23
Inventories 53.6 47.4 +6.2 Growing From Contracting 1
Customers' Inventories 40.5 39.5 +1.0 Too Low Slower 25
Prices 85.5 85.0 +0.5 Increasing Faster 22
Backlog of Orders 61.0 52.5 +8.5 Growing Faster 4
Exports 62.0 56.0 +6.0 Growing Faster 22
Imports 55.5 56.5 -1.0 Growing Slower 20
OVERALL ECONOMY Growing Slower 23
Manufacturing Sector Growing Slower 21
*Number of months moving in current direction.

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