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April 2006 Manufacturing ISM Report On Business - PMI at 57.3%

Monday, May 08, 2006

Press release from the issuing company

(Tempe, Arizona) — Economic activity in the manufacturing sector grew in April for the 35th consecutive month, while the overall economy grew for the 54th 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. "The manufacturing sector grew at a faster rate during April as production and employment showed significant strength. The level of activity is driving some inventory growth as the Inventory Index moved above 50 percent, reversing a 12-month trend. April's Index of 57.3 percent is the highest since November 2005. While many members indicate that business is good, they still have major concerns about the impact of higher prices for energy and industrial commodities." TOP PERFORMING INDUSTRIES The 15 industries reporting growth in April — listed in order — are: Miscellaneous*; Primary Metals; Transportation & Equipment; Electronic Components & Equipment; Fabricated Metals; Industrial & Commercial Equipment & Computers; Wood & Wood Products; Glass, Stone & Aggregate; Apparel; Food; Printing & Publishing; Instruments & Photographic Equipment; Chemicals; Furniture; and Rubber & Plastic Products. WHAT RESPONDENTS ARE SAYING ... "Gasoline and diesel price hikes in the Northeast continue to cause concern as freight costs escalate." (Chemicals) "Seasonal ramp-up is starting 45 to 60 days earlier than prior years." (Electronic Components & Equipment) "We continue to stay busy, but there's great concern about [auto] plant closing." (Fabricated Metals) "It is difficult to find experienced people at all levels for employment." (Glass, Stone & Aggregate) "New orders for Q1 2006 were stronger than expected." (Printing & Publishing) PMI The PMI indicates that the manufacturing economy grew in April for the 35th consecutive month as it registered 57.3 percent, an increase of 2.1 percentage points when compared to March's reading of 55.2 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy. The April PMI indicates that both the overall economy and the manufacturing sector are growing. "The past relationship between the PMI and the overall economy indicates that the average PMI for January through April (56 percent) corresponds to a 4.8 percent increase in real gross domestic product (GDP). In addition, if the PMI for April (57.3 percent) is annualized, it corresponds to a 5.3 percent increase in real GDP annually."

 

 

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