(Tempe, Arizona) —- Economic activity in the manufacturing sector grew in November for the 30th consecutive month, while the overall economy grew for the 49th 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 expanded in November based on the ISM data. The PMI again showed significant strength in manufacturing activity as the index indicates strong growth during the month. The New Orders and Production indexes continue to drive the sector. While energy costs and supply interruptions remain a concern, purchasers are satisfied in general with current business conditions." TOP PERFORMING INDUSTRIES The 17 industries reporting growth in November — listed in order — are: Apparel; Rubber & Plastic Products; Electronic Components & Equipment; Tobacco; Textiles; Miscellaneous*; Primary Metals; Food; Paper; Chemicals; Industrial & Commercial Equipment & Computers; Instruments & Photographic Equipment; Furniture; Transportation & Equipment; Fabricated Metals; Glass, Stone & Aggregate; and Printing & Publishing. WHAT RESPONDENTS ARE SAYING "The hurricanes along the Gulf Coast are still impacting the supply and delivery of some products and materials." (Chemicals) "Our business has held strong through the third quarter and we are on track for a record sales year." (Electronic Components & Equipment) "Our production is sold out for the rest of the year. Spare parts are difficult to get due to long leadtimes. (Glass, Stone & Aggregate) "Concerned that business will be slowing due to housing decline." (Industrial & Commercial Equipment & Computers) "The hurricanes destroyed many trucks ... [which resulted in] extra business." (Transportation & Equipment) NOVEMBER 2005 MANUFACTURING INDEX SUMMARIES PMI The PMI indicates that the manufacturing economy grew in November for the 30th consecutive month. The PMI for November registered 58.1 percent, a decrease of 1 percentage point when compared to October's reading of 59.1 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 42.7 percent, over a period of time, generally indicates an expansion of the overall economy. The November 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 November (55.7 percent) corresponds to a 4.7 percent increase in real gross domestic product (GDP) on an annual basis. In addition, if the PMI for November (58.1 percent) is annualized, it corresponds to a 5.6 percent increase in real GDP annually. New Orders ISM's New Orders Index grew in November with a reading of 59.8 percent. The index is 1.9 percentage points lower than the 61.7 percent registered in October, and November is the 31st consecutive month the index has exceeded 50 percent. A New Orders Index above 51.1 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars). Thirteen industries reported increases during November: Apparel; Rubber & Plastic Products; Textiles; Paper; Electronic Components & Equipment; Miscellaneous*; Chemicals; Industrial & Commercial Equipment & Computers; Food; Primary Metals; Transportation & Equipment; Instruments & Photographic Equipment; and Printing & Publishing. Production ISM's Production Index registered 60.6 percent in November, 1.4 percentage points lower than the 62 percent reported in October. November is the 31st consecutive month of growth in the index. An index above 50 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. Of the industries reporting in November, 16 registered growth: Tobacco; Apparel; Textiles; Rubber & Plastic Products; Primary Metals; Electronic Components & Equipment; Miscellaneous*; Food; Industrial & Commercial Equipment & Computers; Wood & Wood Products; Printing & Publishing; Paper; Chemicals; Fabricated Metals; Instruments & Photographic Equipment; and Transportation & Equipment. Employment ISM's Employment Index registered growth in November for the fifth consecutive month. The index registered 56.6 percent in November compared to 55 percent in October, an increase of 1.6 percentage points. An Employment Index above 48.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. The 12 industries reporting growth in employment during November are: Apparel; Electronic Components & Equipment; Miscellaneous*; Furniture; Glass, Stone & Aggregate; Primary Metals; Rubber & Plastic Products; Fabricated Metals; Instruments & Photographic Equipment; Industrial & Commercial Equipment & Computers; Transportation & Equipment; and Food. Supplier Deliveries The delivery performance of suppliers to manufacturing organizations was slower for the 29th consecutive month in November. ISM's Supplier Deliveries Index for November registered 58.3 percent, a decrease of 3.4 percentage points when compared to October's reading of 61.7 percent. A reading above 50 percent indicates slower deliveries. The 10 industries reporting slower supplier deliveries in November are: Apparel; Glass, Stone & Aggregate; Chemicals; Fabricated Metals; Furniture; Food; Instruments & Photographic Equipment; Wood & Wood Products; Primary Metals; and Electronic Components & Equipment. Inventories Manufacturers' inventories declined in November for the eighth consecutive month as ISM's Inventories Index registered 49.3 percent, indicating a slower rate of liquidation when compared to October's reading of 48.1. November's index represents a 1.2 percentage point increase over October. An Inventories Index greater than 42.3 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA) figures on overall manufacturing inventories (in chained 2000 dollars). The five industries reporting higher inventories in November are: Apparel; Miscellaneous*; Furniture; Wood & Wood Products; and Paper. Customers' Inventories** The November Customers' Inventories Index is at 43.5 percent, 2.5 percentage points higher than the 41 percent reported in October. Respondents indicate that their customers do not have sufficient inventories on hand (inventories are too low) at this time. This is the 54th consecutive month that the index has registered below 50 percent. Furniture is the only industry reporting higher customers' inventories during November. Prices** In November, the ISM Prices Index was 74 percent, indicating significant growth. However, it is down 10 percentage points from the 84 percent it registered in October. While 53 percent of supply executives reported paying higher prices and 5 percent reported paying lower prices, 42 percent reported that prices were unchanged from the preceding month. A Prices Index above 47.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices. In November, 17 industries reported paying higher prices: Textiles; Glass, Stone & Aggregate; Rubber & Plastic Products; Miscellaneous*; Furniture; Food; Instruments & Photographic Equipment; Industrial & Commercial Equipment & Computers; Printing & Publishing; Primary Metals; Apparel; Paper; Chemicals; Transportation & Equipment; Electronic Components & Equipment; Fabricated Metals; and Wood & Wood Products. Backlog of Orders** ISM's Backlog of Orders Index registered 53 percent, indicating manufacturers' backlogs in November are growing when compared to October. This represents a 2.5 percentage point decrease compared to the 55.5 percent reported in October. Of the 83 percent of respondents who report their backlog of orders, 24 percent reported greater backlogs, 18 percent reported smaller backlogs, and 58 percent reported no change from October. The eight industries reporting an increase in order backlogs during the month are: Apparel; Rubber & Plastic Products; Electronic Components & Equipment; Industrial & Commercial Equipment & Computers; Furniture; Food; Chemicals; and Primary Metals. New Export Orders ISM's New Export Orders Index for November registered 59.2 percent, an increase of 4.4 percentage points when compared to October's index of 54.8 percent. This is the 47th consecutive month of growth in export orders. The 12 industries reporting growth in new export orders in November are: Textiles; Apparel; Miscellaneous*; Paper; Instruments & Photographic Equipment; Printing & Publishing; Chemicals; Industrial & Commercial Equipment & Computers; Electronic Components & Equipment; Fabricated Metals; Rubber & Plastic Products; and Food. Imports Imports of materials by manufacturers grew during November as the Imports Index registered 54.1 percent. The index decreased 4.1 percentage points when compared to October's index of 58.2 percent, indicating a slower rate of growth. The 10 industries reporting growth in import activity for November are: Apparel; Furniture; Transportation & Equipment; Electronic Components & Equipment; Industrial & Commercial Equipment & Computers; Rubber & Plastic Products; Instruments & Photographic Equipment; Chemicals; Food; and Fabricated Metals. *Miscellaneous is a preponderance of jewelry, toys, sporting goods and musical instruments. **The Backlog of Orders, Prices and Customers' Inventories Indexes do not meet the accepted criteria for seasonal adjustments. Buying Policy Average commitment leadtime for Capital Expenditures decreased 2 days to 108 days. Average leadtime for Production Materials was unchanged at 50 days. Average leadtime for Maintenance, Repair and Operating (MRO) supplies decreased 2 days to 22 days.