Manufacturing Index: Evidence of a Return to a Strong Economy Continues to Mount
Press release from the issuing company
-- Includes analysis from Dr. Joe Webb
December 2, 2003 -- (WhatTheyThink.com) -- Economic activity in the manufacturing sector grew in November for the fifth consecutive month, while the overall economy grew for the 25th 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 enjoyed its best month since December 1983. The big improvement is in Employment as the index rose above 50 percent, indicating growth, following 37 consecutive months of decline. The momentum is coming from continued strength in New Orders and Production as the indexes are presently at very lofty levels."
Backlog of Orders Index indicates that order backlogs increased in November, and the Employment Index reversed a long-term trend of contraction as it indicates growth during the month. ISM's Prices Index indicates that manufacturers experienced higher prices in their purchases. The New Export Orders and Import Indexes continue to grow.
Comments from purchasing and supply managers are more upbeat this month as various industry segments are starting to see improvement. While overall employment appears to be improving, respondents still mention current or impending layoffs. Several indicate transferring production of "product lines" to offshore manufacturing.
Comments from Dr. Joe Webb:
"Though the American Thanksgiving holiday weekend pre-empted my usual Friday column, I have still been monitoring economic news -- and there has been lots of it, mostly good. Here’s a quick peek at the latest. Tune in Friday for more including links to all the data referenced below...
"The Institute for Supply Management's Manufacturing Index took a hefty jump in November, climbing to 62.8 from October's reading of 57.0. Finally, after 37 months of contraction, the employment component of the index went to 51 (any figure above 50 is a sign of growth). Inventories were considered as being too low, a good sign for more growth ahead. This was claimed to be the best report since December 1983.
"In more good economic news, confusing the experts yet again, initial jobless claims went down by 11,000, bringing the total to 351,000, and the 4-week moving average to 358,750. The 11,000 and 358,750 are lowest in almost three years.
"October's durable goods went up by 2.6% (the expected number was 6%), with computers and electronics up 4%. And what's more, all of the major categories for the September report were revised upward (we had a warning about this from the GDP revision of the other day).
“Personal income rose 0.4%, but consumer spending was flat, as auto sales were down a bit. Hey, those credit cards have to get ready for what I expect will be a great holiday retail season."
Premium Access Members at WhatTheyThink.com can view more analysis in Dr. Joe Webb’s weekly column on Friday, appropriately called "Fridays with Dr. Joe".
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