September Manufacturing Index: New Orders Grow, Inventories Decline
Friday, October 03, 2003
(Tempe, Arizona) — Economic activity in the manufacturing sector grew in September for the third consecutive month, while the overall economy grew for the 23rd 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 continued to improve for the third consecutive month as new orders and production show evidence of a stronger economy in September. Both of these indices have grown over the past five months, which is very encouraging considering the challenges that the economy has faced in the last two years." ISM's Backlog of Orders Index indicates that order backlogs improved again in September. However, manufacturing Employment continued to decline in September as the index remained below the breakeven point (an index of 50 percent) for the 36th consecutive month. ISM's Prices Index indicates that manufacturers experienced higher prices for the 19th consecutive month. New Export Orders grew in September for the 21st consecutive month, while September's Imports Index grew for the 11th consecutive month. Comments from purchasing and supply managers indicate softness in many industries and concerns about energy prices. It is hard to draw a consensus, as there are definitely winners and losers in this recovery. ISM's PMI is 53.7 percent in September, a decrease of 1 percentage point when compared to 54.7 in August. ISM's New Orders Index rose 0.8 percentage point from 59.6 percent in August to 60.4 percent in September. ISM's Production Index declined 4.3 percentage points from 61.6 percent in August to 57.3 percent in September. The ISM Employment Index is at 45.7 percent for September, a decrease of 0.2 percentage point when compared to the 45.9 percent reported in August. ISM's Supplier Deliveries Index registered 52.4 percent, 0.9 percentage point lower than August's 53.3 percent. ISM's Inventories Index rose to 42.7 percent in September from the 42.5 percent reported in August. ISM's Customers' Inventories Index for September is at 44.5 percent, an increase of 1.5 percentage points compared to the August reading of 43 percent. ISM's Prices Index in September is 56 percent, 3 percentage points higher than the 53 percent reported in August. ISM's Backlog of Orders Index increased 1 percentage point, registering 52.5 percent in September compared to 51.5 percent in August. ISM's New Export Orders Index registered 52.9 percent, down 2.4 percentage points from August's 55.3 percent, while ISM's Imports Index rose 5.6 percentage points to 60.7 percent in September from 55.1 percent in August. "The strength in New Orders during September is a very positive sign as we move into the fourth quarter. The overall picture is better; some manufacturers are very happy with the improvement, while others are waiting for their sector to pickup," said Ore. Of the 20 industries in the manufacturing sector, 13 industries reported growth: Furniture; Food; Wood & Wood Products; Instruments & Photographic Equipment; Electronic Components & Equipment; Printing & Publishing; Chemicals; Glass, Stone, & Aggregate; Transportation & Equipment; Fabricated Metals; Industrial & Commercial Equipment & Computers; Rubber & Plastic Products; and Apparel. "There are no commodities reported in short supply. Commodities reported up in price are: Aluminum Extrusions; Chemicals; Copper; Corrugated; Diesel Fuel; Energy; Gasoline; Lumber; Natural Gas; Nickel; Plastics; Propylene; and Steel Scrap. The commodities reported down in price are Caustic Soda; Computers; Corrugated; Methanol; Natural Gas; and Paper," Ore stated.