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PMI® at 51.5%; March Manufacturing ISM® Report On Business®; New Orders, Production and Inventories Growing; Employment Unchanged; Supplier Deliveries Slowing
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of March 2015.
TEMPE, Ariz., April 1, 2015 /PRNewswire/ -- Economic activity in the manufacturing sector expanded in March for the 27th consecutive month, and the overall economy grew for the 70th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The March PMI® registered 51.5 percent, a decrease of 1.4 percentage points from February's reading of 52.9 percent. The New Orders Index registered 51.8 percent, a decrease of 0.7 percentage point from the reading of 52.5 percent in February. The Production Index registered 53.8 percent, 0.1 percentage point above the February reading of 53.7 percent. The Employment Index registered 50 percent, 1.4 percentage points below the February reading of 51.4 percent, reflecting unchanged employment levels from February. Inventories of raw materials registered 51.5 percent, a decrease of 1 percentage point from the February reading of 52.5 percent. The Prices Index registered 39 percent, 4 percentage points above the February reading of 35 percent, indicating lower raw materials prices for the fifth consecutive month. Comments from the panel refer to continuing challenges from the West Coast port issue, lower oil prices having both positive and negative impacts depending upon the industry, residual effects of the harsh winter, higher costs of healthcare premiums, and challenges associated with the stronger dollar on international business." Of the 18 manufacturing industries, 10 are reporting growth in March in the following order: Paper Products; Wood Products; Transportation Equipment; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Chemical Products; Primary Metals; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The seven industries reporting contraction in March — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Plastics & Rubber Products; and Furniture & Related Products. WHAT RESPONDENTS ARE SAYING …
Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes. COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY Commodities Up in Price Commodities Down in Price Commodities in Short Supply Note: The number of consecutive months the commodity is listed is indicated after each item. MARCH 2015 MANUFACTURING INDEX SUMMARIES PMI® A PMI® in excess of 43.1 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the March PMI® indicates growth for the 70th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the 27th consecutive month. Holcomb stated, "The past relationship between the PMI® and the overall economy indicates that the average PMI® for January through March (52.6 percent) corresponds to a 3 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI® for March (51.5 percent) is annualized, it corresponds to a 2.6 percent increase in real GDP annually." THE LAST 12 MONTHS
New Orders The nine industries reporting growth in new orders in March — listed in order — are: Wood Products; Paper Products; Fabricated Metal Products; Transportation Equipment; Food, Beverage & Tobacco Products; Machinery; Furniture & Related Products; Chemical Products; and Computer & Electronic Products. The eight industries reporting a decrease in new orders during March — listed in order — are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Textile Mills; Petroleum & Coal Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Primary Metals; and Plastics & Rubber Products.
Production The nine industries reporting growth in production during the month of March — listed in order — are: Paper Products; Transportation Equipment; Nonmetallic Mineral Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Primary Metals; Machinery; and Computer & Electronic Products. The five industries reporting a decrease in production during March are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; and Plastics & Rubber Products.
Employment Of the 18 manufacturing industries, in March, seven industries reported employment growth in the following order: Printing & Related Support Activities; Nonmetallic Mineral Products; Paper Products; Primary Metals; Transportation Equipment; Machinery; and Plastics & Rubber Products. The seven industries reporting a decrease in employment in March — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing.
Supplier Deliveries The 11 industries reporting slower supplier deliveries in March — listed in order — are: Textile Mills; Wood Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Furniture & Related Products; Transportation Equipment; Miscellaneous Manufacturing; Machinery; Fabricated Metal Products; Computer & Electronic Products; and Chemical Products. The four industries reporting faster supplier deliveries during March are: Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; and Paper Products.
Inventories* The eight industries reporting higher inventories in March — listed in order — are: Printing & Related Support Activities; Primary Metals; Machinery; Miscellaneous Manufacturing; Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; and Transportation Equipment. The five industries reporting lower inventories in March are: Plastics & Rubber Products; Apparel, Leather & Allied Products; Textile Mills; Furniture & Related Products; and Paper Products.
Customers' Inventories* The three manufacturing industries reporting customers' inventories as being too high during the month of March are: Electrical Equipment, Appliances & Components; Primary Metals; and Food, Beverage & Tobacco Products. The eight industries reporting customers' inventories as too low during March — listed in order — are: Transportation Equipment; Paper Products; Furniture & Related Products; Plastics & Rubber Products; Machinery; Chemical Products; Computer & Electronic Products; and Fabricated Metal Products.
Prices* Of the 18 manufacturing industries, the two industries reporting paying increased prices for its raw materials in March are: Food, Beverage & Tobacco Products; and Computer & Electronic Products. The 14 industries reporting paying lower prices during the month of March — listed in order — are: Paper Products; Petroleum & Coal Products; Printing & Related Support Activities; Wood Products; Apparel, Leather & Allied Products; Textile Mills; Fabricated Metal Products; Machinery; Furniture & Related Products; Plastics & Rubber Products; Transportation Equipment; Nonmetallic Mineral Products; Chemical Products; and Primary Metals.
Backlog of Orders* The six industries reporting increased order backlogs in March — listed in order — are: Wood Products; Fabricated Metal Products; Machinery; Nonmetallic Mineral Products; Chemical Products; and Transportation Equipment. The nine industries reporting a decrease in order backlogs during March — listed in order — are: Textile Mills; Plastics & Rubber Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Paper Products; Food, Beverage & Tobacco Products; Furniture & Related Products; Computer & Electronic Products; and Primary Metals.
New Export Orders* The five industries reporting growth in new export orders in March are: Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Machinery; and Miscellaneous Manufacturing. The eight industries reporting a decrease in new export orders during March — listed in order — are: Textile Mills; Furniture & Related Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Primary Metals; Transportation Equipment; Paper Products; and Chemical Products.
Imports* The eight industries reporting growth in imports during the month of March — listed in order — are: Textile Mills; Primary Metals; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Chemical Products; Computer & Electronic Products; and Furniture & Related Products. The five industries reporting a decrease in imports during March are: Nonmetallic Mineral Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Food, Beverage & Tobacco Products.
* The Inventories, Customers' Inventories, Prices, Backlog of Orders, New Export Orders and Imports Indexes do not meet the accepted criteria for seasonal adjustments. Buying Policy
About This Report Data and Method of Presentation Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive). The resulting single index number for those meeting the criteria for seasonal adjustments (PMI®, New Orders, Production, Employment and Supplier Deliveries) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The PMI® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), and Inventories. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI® in excess of 43.1 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.1 percent, it is generally declining. The distance from 50 percent or 43.1 percent is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM® has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM® Report On Business® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM® then compiles the report for release on the first business day of the following month. The industries reporting growth, as indicated in the Manufacturing ISM® Report On Business® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease. Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Production Materials; Capital Expenditures; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern. About Institute for Supply Management® The full text version of the Manufacturing ISM® Report On Business® is posted on ISM®'s website at www.ism.ws on the first business day* of every month after 10:00 a.m. (ET). The next Manufacturing ISM® Report On Business® featuring the April 2015 data will be released at 10:00 a.m. (ET) on Friday, May 1, 2015. *Unless the NYSE is closed.
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