NewsDesk Deals, Openings, Acquisitions, Partnerships, Orders, Expansions, Awards Positive ISM Report Has a Big Asterisk or Two W
hile the Institute for Supply Management reported that US manufacturing outdid expectations and expanded in September—after a summer slow- down—global manufacturing is contracting and could derail growth here. That’s the conclusion of a bevy of recently released reports on global manufacturing and trade. On Oct. 1, the Institute for Supply Management’s monthly
Manufacturing Report on Business reported that the Purchas- ing Managers Index registered 51.5%, an increase of 1.9 percentage points from August’s reading of 49.6%, indicating a return to expansion after contracting for three consecutive months. The report is based on an ISM survey of more than 300 manufacturing companies from a variety of sectors. The reading beat generally low expectations and led to a round of positive headlines about US manufacturing returning to growth. Importantly, the New Orders Index registered 52.3%, an in-
crease of 5.2 percentage points from August, indicating growth in new orders after three months of contraction. The Production Index registered 49.5%, an increase of 2.3 percentage points and indicating contraction in production for the second time since May 2009. The Employment Index increased by 3.1 per- centage points, registering 54.7%. The Prices Index increased 4 percentage points from its August reading to 5%. The report reflected a mix of optimism over new orders
beginning to pick up, and continued concern over soft global business conditions and an unsettled political environment.
contraction in September were: Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Transporta- tion Equipment; Machinery; Chemical Products; and Com- puter & Electronic Products.
THE LAST 12 MONTHS Month PMI™
Month PMI™
Sep 2012 51.5 Mar 2012 53.4 Aug 2012 49.6 Feb 2012 52.4 Jul 2012 49.8 Jan 2012 54.1 Jun 2012 49.7 Dec 2011 53.1 May 2012 53.5 Nov 2011 52.2 Apr 2012 54.8 Oct 2011 51.8
Average for 12 months – 52.2 High – 54.8
Low – 49.6
The past relationship between the PMI and the overall economy indicates that the GDP grew by 3.2% from January through September. ISM’s Non-Manufacturing ISM Report on Business, released on Oct. 3, also indicated strong US growth, register- ing a 55.1% in September, for the 33rd consecutive month of growth in the nonmanufacturing sector.
“We need a renewed commitment to revitalize the multilateral trading system which can restore economic certainty at a time when it is badly needed.”
Of the 18 manufacturing industries surveyed, 11 reported growth in September in the following order: Textile Mills; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Wood Products; Apparel, Leather & Allied Products; Paper Products; Petroleum & Coal Products; Primary Metals; Fabricated Metal Products; Furniture & Related Products; and Miscellaneous Manufacturing. The six industries that reported
In an attempt to further boost growth, especially jobs, Federal Reserve Chairman Ben S. Bernanke has said it would keep interest rates close to zero through at least mid-2015 and begin a new quantitative easing program in which it would buy $40 billion in mortgage bonds a month. “The Committee will closely monitor incoming information on economic and financial developments in coming months,”