Manufacturing Showing Acceleration

December 1, 2004
Print
Text Size:
A A

TEMPE, AZ — Manufacturing activity grew in November for the 18th consecutive month — and grew faster — while the overall economy grew for the 37th consecutive month.

So say the nation's supply executives in the latest Report On Business from the Manufacturing Institute for Supply Management.

This morning's report was from Norbert J. Ore, CPM, chair of the ISM Business Survey Committee and group director for strategic sourcing and procurement, Georgia-Pacific Corp.

In a prepared statement Ore said, "November reverses three consecutive months in which the rate of growth had slowed. The manufacturing sector appears poised to end the year on a strong note as the new orders index made its way back above the 60 percent mark, and the employment index picked up significant momentum.

"It appears the manufacturing sector is definitely sustaining its momentum," he said, "as this month's PMI strengthened slightly while continuing to indicate a gradual downward trend.

"Prices are a big issue," Ore cautioned, "but the strength in new orders offsets some of those concerns as companies work to benefit from the volume."

He said the ISM prices index indicates significant upward pressure on prices.

ISM reported that comments from respondents in November focused on inflationary concerns. "While many manufacturers are enjoying strong sales," the ISM report said, "there is concern that commodity prices are eroding profits. Energy leads the list of inflationary drivers, as many commodities are derived from oil and gas feedstocks."

Ore reported that ISM's customers' inventories index indicates that customer inventories are too low even though the backlog of orders index decreased in November. The new export orders and imports indexes continued to grow in November.

Other PMI indices:

  • New orders — Rose from 58.3 percent in October to 61.5 percent.

  • Production — Decreased from 58.9 percent in October to 57 percent.

  • Employment — Increased 2.8 percentage points above October's 54.8 percent.

  • Supplier deliveries — 2.1 percentage points below October's 58.6 percent.

  • Inventories — 50.7 percent in November, up from 48.2 percent.

  • Customers' inventories — Unchanged from October's 43.5 percent.

  • Backlog of orders — Declined to 47.5 percent from October's 49 percent.    

Editor's Picks

Comments powered by Disqus