January 2017 Manufacturing ISM Report on Business: PMI at 56%
February 2, 2017 | ISMEstimated reading time: 4 minutes
Economic activity in the manufacturing sector expanded in January, and the overall economy grew for the 92nd 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 January PMI registered 56%, an increase of 1.5 percentage points from the seasonally adjusted December reading of 54.5%. The New Orders Index registered 60.4%, an increase of 0.1 percentage point from the seasonally adjusted December reading of 60.3%. The Production Index registered 61.4%, 2 percentage points higher than the seasonally adjusted December reading of 59.4%. The Employment Index registered 56.1%, an increase of 3.3 percentage points from the seasonally adjusted December reading of 52.8%. Inventories of raw materials registered 48.5 percent, an increase of 1.5 percentage points from the December reading of 47%. The Prices Index registered 69% in January, an increase of 3.5 percentage points from the December reading of 65.5%, indicating higher raw materials prices for the 11th consecutive month. The PMI®, New Orders, and Production Indexes all registered their highest levels since November of 2014, and comments from the panel are generally positive regarding demand levels and business conditions.”
PMI
Manufacturing expanded in January as the PMI registered 56 percent, an increase of 1.5 percentage points from the seasonally adjusted December reading of 54.5%, indicating growth in manufacturing for the fifth consecutive month. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.
A PMI above 43.3%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the January PMI indicates growth for the 92nd consecutive month in the overall economy, and indicates growth in the manufacturing sector for the fifth consecutive month. Holcomb stated, "The past relationship between the PMI® and the overall economy indicates that the PMI for January (56%) corresponds to a 4% increase in real gross domestic product (GDP) on an annualized basis."
New Orders
ISM’s New Orders Index registered 60.4 percent in January, which is an increase of 0.1 percentage point when compared to the seasonally adjusted 60.3% reported for December, indicating growth in new orders for the fifth consecutive month. A New Orders Index above 52.3%, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The 12 industries reporting growth in new orders in January — listed in order — are: Plastics & Rubber Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Chemical Products; Paper Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Primary Metals; Machinery; Fabricated Metal Products; and Food, Beverage & Tobacco Products. The five industries reporting a decrease in new orders during January are: Nonmetallic Mineral Products; Wood Products; Textile Mills; Computer & Electronic Products; and Furniture & Related Products.
Production
ISM’s Production Index registered 61.4 percent in January, which is an increase of 2 percentage points when compared to the seasonally adjusted 59.4% reported for December, indicating growth in production for the fifth consecutive month. An index above 51.4%, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The 10 industries reporting growth in production during the month of January — listed in order — are: Miscellaneous Manufacturing; Apparel, Leather & Allied Products; Paper Products; Petroleum & Coal Products; Plastics & Rubber Products; Transportation Equipment; Chemical Products; Machinery; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The five industries reporting a decrease in production during January are: Wood Products; Textile Mills; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; and Furniture & Related Products.
Employment
ISM’s Employment Index registered 56.1% in January, an increase of 3.3 percentage points when compared to the seasonally adjusted December reading of 52.8%, indicating growth in employment in January for the fourth consecutive month. An Employment Index above 50.5%, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, the 10 reporting employment growth in January — listed in order — are: Textile Mills; Paper Products; Food, Beverage & Tobacco Products; Machinery; Electrical Equipment, Appliances & Components; Chemical Products; Miscellaneous Manufacturing; Transportation Equipment; Computer & Electronic Products; and Nonmetallic Mineral Products. The five industries reporting a decrease in employment in January are: Plastics & Rubber Products; Petroleum & Coal Products; Primary Metals; Fabricated Metal Products; and Printing & Related Support Activities.
Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was slower in January as the Supplier Deliveries Index registered 53.6%, which is 0.6 percentage point higher than the seasonally adjusted 53% reported for December. A reading below 50% indicates faster deliveries, while a reading above 50% indicates slower deliveries.
The 11 industries reporting slower supplier deliveries in January — listed in order — are: Textile Mills; Paper Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Petroleum & Coal Products; Primary Metals; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The two industries reporting faster supplier deliveries in January are: Electrical Equipment, Appliances & Components; and Chemical Products.
Suggested Items
NEOTech Positions Itself as Microelectronics Industry Leader with High-Technology Investments
05/09/2024 | NEOTechNEOTech, a leading provider of electronic manufacturing services (EMS), design engineering, and supply chain solutions in the high-tech industrial, medical device, and aerospace/defense markets, announces a significant investment in acquiring new Palomar 8100 wire bonder machines, enhancing the company’s positioning as a leader of cutting-edge microelectronics assemblies for mission-critical applications.
MKS’ Atotech, ESI to Participate in CPCA Show
05/09/2024 | MKS’ AtotechMKS’ Atotech, and ESI will participate in the CPCA Show 2024. The show will be held from May 13 to 15, 2024, at the National Exhibition and Convention Center (Shanghai) and will bring together domestic and international manufacturers in the electronic circuit industry.
Dragonfly Energy Announces Breakthrough in Lithium Battery Production: Eliminating Harmful 'Forever Chemicals'
05/09/2024 | Globe NewswireDragonfly Energy Holdings Corp., an industry leader in green energy storage, has made a significant breakthrough in battery manufacturing with the successful production of PFAS-free electrodes in lithium battery cells.
Connect the Dots: Designing for Reality—The Pre-Manufacturing Process
05/08/2024 | Matt Stevenson -- Column: Connect the DotsI have been working with Nolan Johnson on a podcast series about designing PCBs for the reality of manufacturing. By sharing lessons learned over a long career in the PCB industry, we hope to shorten learning curves and help designers produce better boards with less hassle and rework. Episode 2 deals with the electronic pre-manufacturing process. Moving from CAD (computer-aided design) to CAM (computer-aided manufacturing) is a key step in PCB manufacturing. CAM turns digital designs into instructions that machines can use to actually build the PCB.
All Flex Solutions Hires Mike Madetzke as Manager of R&D
05/08/2024 | All Flex SolutionsAll Flex Solutions is very pleased to announce that Mike Madetzke has joined their team as their new Manager of Research and Development.