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
Your Guide to Voice for the Warehouse
Is voice a good fit for my operation? How would voice work in my warehouse? With the help of the Vitech Guide to Voice, you can find all the answers to your voice questions in one place.
Download Today!
From the October 2017 Modern Materials Handling Issue
An early adopter, Rochester Drug Cooperative is using robotic piece-picking technology to complement picking of slow-moving items. System report for Rochester Drug Cooperative, Robotic picking and inventory management, Innovative distribution center robotics solutions , IAM Robotics case study
Injecting agility into WMS implementation
The Big Picture: Business as Unusual
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
The State of the DC Voice Market
A lot has changed in the last 10 years, especially in voice technology. This webinar will cover the state of the voice market, review two leading voice solutions and help you gain a better understanding of the options and capabilities available today.
Register Today!
EDITORS' PICKS
Rochester Drug Cooperative: Robots ready for work
It’s still early stages, but Rochester Drug Cooperative is proving that mobile robotic piece...
Manufacturing Day: 2,716 events from Hawaii to Alaska to Puerto Rico
Events to be scheduled throughout the month, so the remaining 249,185 manufacturing firms in the...

System Report: Pouch sorter powers Stage’s fulfillment needs
How a hometown department store chain transformed its e-fulfillment processes with pouch sortation...
Cubing and Weighing Equipment: Measure Up
The use of cubing and weighing equipment is growing beyond dimensional weight applications.