The manufacturing sector continues to perform above expectations

Source: ISM

May 18, 2011

Economic activity in the manufacturing sector expanded in April for the 21st consecutive month, and 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 by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. "The recent trend of rapid growth in the manufacturing sector continued in April as the PMI registered above 60% for the fourth consecutive month. The New Orders and Production Indexes continue to drive the PMI, as they have both exceeded 60% for five consecutive months. Manufacturing employment appears to have developed significant momentum, as the Employment Index readings for the first four months of 2011 are the highest readings in the last 38 years. Inventory growth also took place in April after two months of destocking; however, the inventory restocking would appear to be necessitated by the strong performance in new orders. While the manufacturing sector is definitely performing above most expectations so far in 2011, manufacturers are experiencing significant cost pressures from commodities and other inputs."

Performance by industry

Of the 18 manufacturing industries, 17 are reporting growth in April, in the following order: Wood Products; Plastics & Rubber Products; Primary Metals; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; Apparel, Leather & Allied Products; Machinery; Textile Mills; Paper Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Printing & Related Support Activities; and Petroleum & Coal Products. Furniture & Related Products is the only industry reporting contraction in April.

APRIL 2011



PMI 60.4 61.2 -0.8 Growing Slower 21
New Orders 61.7 63.3 -1.6 Growing Slower 22
Production 63.8 69.0 -5.2 Growing Slower 23
Employment 62.7 63.0 -0.3 Growing Slower 19
Supplier Deliveries 60.2 63.1 -2.9 Slowing Slower 23
Inventories 53.6 47.4 +6.2 Growing From Contracting 1
Customers' Inventories 40.5 39.5 +1.0 Too Low Slower 25
Prices 85.5 85.0 +0.5 Increasing Faster 22
Backlog of Orders 61.0 52.5 +8.5 Growing Faster 4
Exports 62.0 56.0 +6.0 Growing Faster 22
Imports 55.5 56.5 -1.0 Growing Slower 20
OVERALL ECONOMY Growing Slower 23
Manufacturing Sector Growing Slower 21
*Number of months moving in current direction.

Commodities reported up/down in price and in short supply

Commodities up in price

Aluminum (8); Aluminum Products (4); Brass (5); Caustic Soda (2); Chemicals (2); Cocoa/Cocoa Powder (3); Copper (9); Copper Based Products (6); Copper Wire; Corn (8); Diesel (5); Electric/Electronic Components (2); Fuel Oils (4); Fuel Surcharges (2); High Density Polyethylene (2); LDPE; Natural Gas; Oils and Lubrication; PET (2); Plastics (4); Plastic Products (4); Plastic Resins (6); Poly Bags; Polyethylene (3); Polyethylene Resin (4); Polypropylene (4); Resins (2); Resin Based Products (2); Rubber (2); Rubber Products (3); Silver (2); Solvents; Stainless Steel (6); Steel (8); Steel — Cold Rolled; Steel — Galvanized; Steel Products (5); Titanium Dioxide; and Transportation Rates (2).

Commodities down in price

No commodities are reported down in price.

Commodities in short supply

Capacitors; Electric/Electronic Components (4); Nuts — Food; and Titanium Dioxide (2).

Note: The number of consecutive months the commodity is listed is indicated after each item.

Learn more about the Manufacturing ISM Report On Business