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Manufacturing Index: Production, New Orders, Employment Grow

Thursday, February 05, 2004

Press release from the issuing company

(Tempe, Arizona) — Economic activity in the manufacturing sector grew in January for the eighth consecutive month, while the overall economy grew for the 27th 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. "The manufacturing sector gained momentum in January as the PMI continued to accelerate. Both New Orders and Production remain quite strong, indicating that the manufacturing sector is experiencing a much-needed recovery. The Prices Index accelerated significantly as the metals and energy categories showed significant price volatility." ISM's Backlog of Orders Index indicates that order backlogs increased in January, and the Employment Index grew for the third consecutive month. ISM's Prices Index indicates that manufacturers experienced significantly higher prices for their purchases. The New Export Orders and Import Indexes continue to grow, with imports growing at a slightly faster rate compared to last month. Comments from purchasing and supply managers are generally encouraging with mentions of "record sales and orders on a per-day basis" and "Companies are beginning to refill their inventory pipelines." However, others are still reporting that they see no sign of the recovery, best exemplified by the comment "Recovery? What recovery?" It is obvious that certain sectors are lagging the rest of manufacturing as we start the new year. ISM's PMI registered 63.6 percent in January, an increase of 0.2 percentage point when compared to the seasonally-adjusted 63.4 percent in December. ISM's New Orders Index declined 2 percentage points from 73.1 percent in December to 71.1 percent in January. ISM's Production Index rose 1.9 percentage points from 69.2 percent in December to 71.1 percent in January. The ISM Employment Index is at 52.9 percent for January, a decrease of 0.6 percentage point when compared to the 53.5 percent reported in December. ISM's Supplier Deliveries Index registered 60.4 percent, 1.8 percentage points higher than December's 58.6 percent. ISM's Inventories Index registered 48.9 percent in January, up from the 46.3 percent reported in December. ISM's Customers' Inventories Index for January is at 40 percent, an increase of 1 percentage point compared to the December reading of 39 percent. ISM's Prices Index in January is 75.5 percent, 9.5 percentage points higher than the 66 percent reported in December. ISM's Backlog of Orders Index decreased 0.5 percentage point, registering 60.5 percent in January compared to 61 percent in December. ISM's New Export Orders Index registered 57.5 percent, a decrease of 2.5 percentage points from December's 60 percent. ISM's Imports Index increased 1.4 percentage points to 59.5 percent in January, up from 58.1 percent in December. "Both exports and imports remain strong based on this month's data. The weaker dollar is supportive of growth in exports, but it does not appear to be deterring imports into the U.S.," said Ore. Of the 20 industries in the manufacturing sector, 17 industries reported growth: Apparel; Textiles; Miscellaneous*; Chemicals; Petroleum; Instruments & Photographic Equipment; Transportation & Equipment; Industrial & Commercial Equipment & Computers; Fabricated Metals; Primary Metals; Glass, Stone, & Aggregate; Electronic Components & Equipment; Paper; Furniture; Printing & Publishing; Food; and Rubber & Plastic Products. "Electronic Components; Propylene; Steel; Steel Plate; and Steel Sheet are the commodities in short supply. Commodities reported up in price are: Aluminum; Aluminum Extrusions; Brass; Cobalt; Coke; Copper; Electronic Components; Energy; Ethylene; Freight; Fuel Oil; Gasoline; Natural Gas; Nickel; Polyethylene; Polyethylene, Film; Propylene; PVC; Resin; Scrap Iron; Soybean Oil; Stainless Steel; Steel; Steel, Bar; Steel, Galvanized; Steel, Hot Rolled; Steel — Sheet; and Sulfuric Acid. The commodities reported down in price are Caustic Soda; Corrugated Cartons; and Linerboard," Ore stated.




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