ISM issues positive manufacturing report for September

The PMI – the index used by ISM to measure manufacturing activity – registered 51.5 percent, an increase of 1.9 percentage points from August’s reading of 49.6 percent.

By ·

Following three consecutive months of slight contraction, economic activity in the manufacturing sector expanded in September. Furthermore,  the overall economy grew for the 40th consecutive month, said the nation’s supply executives in the latest Manufacturing ISM Report On Business.

This is a very positive development, and one which exceeded our expectations,” said Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

The PMI – the index used by ISM to measure manufacturing activity – registered 51.5 percent, an increase of 1.9 percentage points from August’s reading of 49.6 percent. According to Holcomb, this indicates a return to expansion after contracting for three consecutive months.

“The New Orders Index registered 52.3 percent, an increase of 5.2 percentage points from August, indicating growth in new orders after three consecutive months of contraction,” he said.

Meanwhile, the Production Index registered 49.5 percent, an increase of 2.3 percentage points and indicating contraction in production for the second time since May 2009.

Holcomb was especially encouraged by the Employment Index, which increased by 3.1 percentage points, registering 54.7 percent.

“The fact that some companies are beginning to once again is very good news,” he said.

The Prices Index increased 4 percentage points from its August reading to 58 percent.

Nigel Gault, an economist with IHS Global Insight, said ISM’s headline index showed a “welcome improvement” in September, moving above the breakeven 50-mark for the first time since May.

“The most important signal was from orders, which rose for the first time since May,” he said.

Gault also noted that all of the growth in orders came on the domestic side, because export orders declined again.

“Order backlogs are still dropping, but the improvement in domestic orders was a step in the right direction,” he said. “Cost pressures mounted further, led by higher prices for drought-related corn, and petroleum products.”

Both Gault and Holcomb agree that manufacturing continues to hold up better in the U.S. than in the rest of the world. But it is still under pressure from global economic headwinds and domestic policy uncertainty, and overall growth in output and employment is likely to remain at a very modest pace.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Latest Whitepaper
Hydrogen, the Future of Materials Handling
Large, successful organizations are integrating hydrogen fuel cell technology into their lift truck fleets and benefiting from lower operational costs, reduced emissions and improved reliability.
Download Today!
From the October 2016 Issue
Brownells’ new Iowa distribution center has taken touches—and miles—out of the order fulfillment process and increased throughput with near 100% accuracy.
System Report: Brownells new DC is flexible and responsive
Pallet Usage Report: Pallets Remain Critical in the Modern-Day Warehouse
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Pallets: Supporting Product, Processes and the Enterprise
The smallest leak in performance or cost can bring a lean, nimble and speedy supply chain to a halt. During this 30-minute webcast we'll examine how Modern's readers use pallets to keep the wheels turning as they maneuver a road filled with sharp edges and potholes.
Register Today!
Brownells: Designing for Efficiency and Growth
Brownells’ new Iowa distribution center has taken touches—and miles—out of the order...
Industry celebrates National Manufacturing Day
Fourth annual Manufacturing Day is a grassroots effort by U.S. manufacturers to improve the public...

American Eagle Outfitters’ omni-channel journey
The fashion retailer has used warehouse execution software and automation to create a true...
The data-driven lift truck
Now that manufacturers and distributors are using the data from their automated systems to drive...