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November Manufacturing ISM Report: 18th Straight Week of Growth

Friday, December 03, 2004

Press release from the issuing company

(Tempe, Arizona) — Economic activity in the manufacturing sector grew in November for the 18th consecutive month, while the overall economy grew for the 37th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business. The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation. "November reverses three consecutive months in which the rate of growth had slowed. The manufacturing sector appears poised to end the year on a strong note as the New Orders Index made its way back above the 60 percent mark, and the Employment Index picked up significant momentum. There is still significant upward pressure on prices as commodity price increases are common." The ISM Prices Index still indicates that there is significant upward pressure on prices. ISM's Customers' Inventories Index indicates that customer inventories are too low at this time. The Backlog of Orders Index indicates that order backlogs decreased in November. The New Export Orders and Imports Indexes continued to grow in November. Comments from respondents this month focused on inflationary concerns. While many manufacturers are enjoying strong sales, there is concern that commodity prices are eroding profits. Energy leads the list of inflationary drivers as many commodities are derived from oil and gas feedstocks. ISM's PMI registered 57.8 percent in November, an increase of 1 percentage point when compared to 56.8 percent in October. ISM's New Orders Index rose 3.2 percentage points from 58.3 percent in October to 61.5 percent in November. ISM's Production Index decreased 1.9 percentage points from 58.9 percent in October to 57 percent in November. The ISM Employment Index is at 57.6 percent for November, an increase of 2.8 percentage points when compared to the 54.8 percent reported in October. ISM's Supplier Deliveries Index registered 56.5 percent, 2.1 percentage points lower than October's 58.6 percent. ISM's Inventories Index registered 50.7 percent in November, up from the 48.2 percent reported in October. ISM's Customers' Inventories Index for November is at 43.5 percent, unchanged from October. ISM's Prices Index in November is 74 percent, 4.5 percentage points lower than the 78.5 percent reported in October. ISM's Backlog of Orders Index for November declined 1.5 percentage points to 47.5 percent from 49 percent registered in October. ISM's New Export Orders Index registered 54.7 percent, a decrease of 1.9 percentage points from October's 56.6 percent. ISM's Imports Index decreased 0.1 percentage point to 58.4 percent in November, down from 58.5 percent in October. "It appears the manufacturing sector is definitely sustaining its momentum as this month's PMI strengthened slightly while continuing to indicate a gradual downward trend. Prices are a big issue, but the strength in new orders offsets some of those concerns as companies work to benefit from the volume," said Ore. In November, 15 industries reported growth: Miscellaneous*; Food; Textiles; Tobacco; Printing & Publishing; Apparel; Transportation & Equipment; Chemicals; Instruments & Photographic Equipment; Industrial & Commercial Equipment & Computers; Electronic Components & Equipment; Furniture; Wood & Wood Products; Fabricated Metals; and Rubber & Plastic Products. "Acetone; Alcohols; Aluminum; Aluminum Products; Benzene; Caustic Soda; Chemicals; Copper; Copper Products; Corrugated Containers; Diesel Fuel; Electricity; Energy; Ethylene; Freight; Fuel; Fuel Surcharges; Gasoline; High Density Polyethylene; Latex; LDPE; Methanol; Motors; Natural Gas (also reported down in price); Nylon; Oil; Oil-Based Products; Packaging; Paper; PET; Petrochemicals; Plastic Products (various forms); Plastics; Polyethylene; Propylene; Propylene Glycol; Resins; Rubber and Rubber-Based Products; Stainless Steel; Steel; Steel Products (various forms); and Transportation are the commodities reported up in price. The commodities reported down in price are Corn and Corn Products; Eggs; Natural Gas (also reported up in price); and Steel. The commodities listed in short supply are Aluminum and Aluminum-Based Products; Benzene; Caustic Soda; Maleic Anhydride; Stainless Steel; Steel; and Steel Products (various forms)," Ore stated.

 

 

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