April Manufacturing ISM Report On Business(R); PMI at 48.6%; New Orders, Production, Employment and Inventories Contracting; Supplier Deliveries Slowing.DO NOT CONFUSE con·fuse v. con·fused, con·fus·ing, con·fus·es v.tr. 1. a. To cause to be unable to think with clarity or act with intelligence or understanding; throw off. b. THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of April 2008. TEMPE, Ariz. -- Economic activity in the manufacturing sector failed to grow in April, while the overall economy grew for the 78th consecutive month, say the nation's supply executives in the latest Manufacturing ISM See ISM band. Report On Business([R]). The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management[TM] Manufacturing Business Survey Committee. "The manufacturing sector failed to grow in April as the PMI See Private Mortgage Insurance. fell below 50 percent for the third consecutive month. Manufacturers are in a situation where both new orders and production are slowly declining, but prices continue to rise at highly inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. rates. Bright spots this month are the growth in the Backlog of Orders Index after six consecutive months of decline, continued strength in new export orders and a reduction in customers' inventories." PERFORMANCE BY INDUSTRY The seven industries reporting growth in April -- listed in order -- are: Computer & Electronic Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Paper Products; Transportation Equipment; Machinery; Furniture & Related Products; and Chemical Products. The industries reporting contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction in April are: Wood Products; Textile Mills; Apparel, Leather & Allied Products; Electrical Equipment A piece of electrical equipment is a machine, powered by electricity and usually consists of an enclosure, a variety of electrical components and often a power switch. Examples of Electrical Equipment
tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: Metal Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Nonmetallic non·me·tal·lic adj. 1. Not metallic. 2. Chemistry Of, relating to, or being a nonmetal. Adj. 1. Mineral Products. WHAT RESPONDENTS In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. ARE SAYING ... * "The decline in the value of the dollar is dramatically affecting our material prices because we purchase over half of our material requirements from overseas." (Transportation Equipment) * "Higher energy rates, unfavorable exchange rates, high levels of inflation in Asia and a drop in demand are challenging our business and supply chain." (Nonmetallic Mineral Products) * "Continued bio-fuel/spec investor driven inflation of commodities is stifling!" (Food, Beverage & Tobacco Products) * "Still strong in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite general business slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. ." (Primary Metals) * "Oil, oil, oil, energy, energy, energy, metals, metals, metals." (Fabricated Metal Products) [TABLE OMITTED] (a) Number of months moving in current direction COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY Commodities Up in Price Aluminum (3); Aluminum Extrusions (2); Caustic Soda caustic soda: see sodium hydroxide. caustic soda Sodium hydroxide (NaOH), an inorganic compound. The alkalies called caustic soda and caustic potash (potassium hydroxide) are very important industrial chemicals, with uses in the manufacture of (2); Copper (3); Copper Laden Products (2); Corn; Corn Syrup corn syrup Sweet syrup produced by breaking down (hydrolyzing) cornstarch (a product of corn). Corn syrup contains dextrins, maltose, and dextrose and is used in baked goods, jelly and jam, and candy. ; Diesel Fuel (2); Fuel Surcharges (2); Gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by ; High Density Polyethylene High-density polyethylene (HDPE) is a polyethylene thermoplastic made from petroleum. It takes 1.75 kilograms of petroleum (in terms of energy and raw materials) to make one kilogram of HDPE. ; Natural Gas (6); Polypropylene polypropylene (pŏl'ēprō`pəlēn), plastic noted for its light weight, being less dense than water; it is a polymer of propylene. It resists moisture, oils, and solvents. ; Propane; Resins resins, n.pl complex, insoluble, sticky substances secreted by plants. Used as astringents, antimicrobials, and antiinflammatories, and are burned as incense. Can cause oral ulcers and epidermal irritations. ; Solvents; Soybean Oil Soy´bean oil n. 1. an oil obtained from the soybean (Glycine max), rich in protein, fats, sterols, and phospholipids, used as a food and in paints and varnishes and in various industrial applications; - ; Stainless Steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. -- Sheet; Steel (4); Steel -- Cold Rolled; Sulfuric Acid sulfuric acid, chemical compound, H2SO4, colorless, odorless, extremely corrosive, oily liquid. It is sometimes called oil of vitriol. Concentrated Sulfuric Acid (6); and Transportation Costs. Commodities Down in Price Methanol methanol, methyl alcohol, or wood alcohol, CH3OH, a colorless, flammable liquid that is miscible with water in all proportions. Methanol is a monohydric alcohol. It melts at −97. is the only commodity reported down in price. Commodities in Short Supply Caustic Soda (2) and Steel. Note: The number of consecutive months the commodity is listed is indicated after each item. APRIL 2008 MANUFACTURING INDEX SUMMARIES PMI Manufacturing failed to grow for the third consecutive month in April as the PMI registered 48.6 percent, the same as in March. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. A PMI in excess of 41.1 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates the overall economy is growing and the manufacturing sector is contracting at this time. Ore stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through April (49.1 percent) corresponds to a 2.5 percent increase in real gross domestic product (GDP GDP (guanosine diphosphate): see guanine. ). In addition, if the PMI for April (48.6 percent) is annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. , it corresponds to a 2.4 percent increase in real GDP Real GDP This inflation-adjusted measure that reflects the value of all goods and services produced in a given year, expressed in base-year prices. Often referred to as "constant-price", "inflation-corrected" GDP or "constant dollar GDP". annually." THE LAST 12 MONTHS [TABLE OMITTED] New Orders ISM's New Orders Index registered 46.5 percent in April, the same as in March. A New Orders Index above 51.6 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars). Six industries reported increases during April: Miscellaneous Manufacturing; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Paper Products; Transportation Equipment; and Chemical Products. The industries that reported decreases during April are: Apparel, Leather & Allied Products; Textile Mills; Petroleum & Coal Products; Plastics & Rubber Products; Fabricated Metal Products; Machinery; Nonmetallic Mineral Products; and Food, Beverage & Tobacco Products. [TABLE OMITTED] Production ISM's Production Index increased to 49.1 percent in April, an increase of 0.4 percentage point from the 48.7 percent reported in March. An index above 49.9 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. Of the industries reporting in April, eight registered growth: Apparel, Leather & Allied Products; Computer & Electronic Products; Miscellaneous Manufacturing; Machinery; Chemical Products; Furniture & Related Products; Paper Products; and Transportation Equipment. The industries that reported decreased production during April are: Textile Mills; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Fabricated Metal Products; and Food, Beverage & Tobacco Products. [TABLE OMITTED] Employment ISM's Employment Index registered 45.4 percent in April, which is a decrease of 3.8 percentage points when compared to the 49.2 percent reported in March. An Employment Index above 49.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics Bureau of Labor Statistics (BLS) A research agency of the U.S. Department of Labor; it compiles statistics on hours of work, average hourly earnings, employment and unemployment, consumer prices and many other variables. (BLS See Bureau of Labor Statistics. ) data on manufacturing employment. The five industries reporting growth in employment during April are: Miscellaneous Manufacturing; Furniture & Related Products; Transportation Equipment; Machinery; and Computer & Electronic Products. The industries that reported decreases in employment during April are: Wood Products; Textile Mills; Primary Metals; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Chemical Products; and Nonmetallic Mineral Products. [TABLE OMITTED] Supplier Deliveries The delivery performance of suppliers to manufacturing organizations continued to slow in April as the Supplier Deliveries Index increased 0.4 percentage point to 54 percent from the 53.6 percent registered in March. A reading above 50 percent indicates slower deliveries. The five industries reporting slower supplier deliveries in April are: Petroleum & Coal Products; Fabricated Metal Products; Computer & Electronic Products; Machinery; and Transportation Equipment. The only industry reporting faster deliveries during April is Nonmetallic Mineral Products. [TABLE OMITTED] Inventories Manufacturers' inventories contracted in April as the Inventories Index registered 48.1 percent, which is 3.2 percentage points higher than the 44.9 percent reported in March. This is the 24th consecutive month of inventory liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy . An Inventories Index greater than 42.4 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA BEA - Basic programming Environment for interactive-graphical Applications, from Siemens-Nixdorf. ) figures on overall manufacturing inventories (in chained 2000 dollars). The five industries reporting higher inventories in April are: Printing & Related Support Activities; Primary Metals; Computer & Electronic Products; Fabricated Metal Products; and Chemical Products. The industries that reported decreases during April are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Wood Products; Petroleum & Coal Products; Furniture & Related Products; Miscellaneous Manufacturing; Machinery; and Transportation Equipment. [TABLE OMITTED] Customers' Inventories(b) The ISM Customers' Inventories Index registered 45 percent in April, a decrease of 6 percentage points when compared to March's reading of 51 percent. The index indicates that respondents believe their customers' inventories are too low at this time. Three industries reported higher customers' inventories during April: Textile Mills; Plastics & Rubber Products; and Fabricated Metal Products. The industries that reported lower customers' inventories during April are: Electrical Equipment, Appliances & Components; Printing & Related Support Activities; Primary Metals; Nonmetallic Mineral Products; Transportation Equipment; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Chemical Products; Machinery; and Furniture & Related Products. [TABLE OMITTED] Prices(b) The ISM Prices Index registered 84.5 percent in April, indicating manufacturers are paying higher prices on average when compared to March. This is the highest reading for the index since it registered 86 percent in May 2004. While 71 percent of respondents reported paying higher prices and 2 percent reported paying lower prices, 27 percent of supply executives reported paying the same prices as the preceding month. A Prices Index above 47.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices. In April, 16 industries reported paying higher prices: Wood Products; Plastics & Rubber Products; Chemical Products; Machinery; Miscellaneous Manufacturing; Fabricated Metal Products; Furniture & Related Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Primary Metals; Transportation Equipment; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Computer & Electronic Products; and Paper Products. [TABLE OMITTED] Backlog of Orders(b) ISM's Backlog of Orders Index registered 51.5 percent in April, 4 percentage points higher than the 47.5 percent reported in March. This is the first month of growth following six consecutive months of contraction in the Backlog of Orders Index. Of the 85 percent of respondents who reported their backlog of orders, 23 percent reported greater backlogs, 20 percent reported smaller backlogs, and 57 percent reported no change from March. The eight industries reporting an increase in order backlogs in April are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; Miscellaneous Manufacturing; Paper Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Computer & Electronic Products. The industries that reported decreases in order backlogs during April are: Wood Products; Nonmetallic Mineral Products; Fabricated Metal Products; Machinery; and Chemical Products. [TABLE OMITTED] New Export Orders(b) ISM's New Export Orders Index registered 57.5 percent in April, an increase of 1 percentage point when compared to March's index of 56.5 percent. This is the 65th consecutive month of growth in export orders. The 11 industries reporting growth in new export orders in April are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; Transportation Equipment; and Fabricated Metal Products. The industries that reported decreases in new export orders during April are: Furniture & Related Products and Chemical Products. [TABLE OMITTED] Imports(b) Imports of materials by manufacturers contracted during April as the Imports Index registered 48 percent, 3 percentage points higher than the 45 percent reported in March. The five industries reporting growth in import activity for April are: Printing & Related Support Activities; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Transportation Equipment; and Machinery. The industries that reported decreases in imports during April are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Petroleum & Coal Products; Paper Products; Plastics & Rubber Products; Computer & Electronic Products; and Chemical Products. [TABLE OMITTED] (b) The Backlog of Orders, Prices, Customers' Inventories, Imports and New Export Orders Indexes do not meet the accepted criteria for seasonal adjustments. Buying Policy Average commitment lead-time for Capital Expenditures decreased 6 days to 112 days. Average lead-time for Production Materials increased 3 day to 49 days. Average lead-time for Maintenance, Repair and Operating (MRO MRO In currencies, this is the abbreviation for the Mauritanian Ouguiya. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) Supplies increased 5 days to 26 days. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] About this Report The data presented herein is obtained from a survey of manufacturing supply managers based on information they have collected within their respective organizations. ISM makes no representation, other than that stated within this release, regarding the individual company data collection procedures. Use of the data is in the public domain and should be compared to all other economic data sources when used in decision-making. Data and Method of Presentation The Manufacturing ISM Report On Business([R]) is based on data compiled from purchasing and supply Purchasing and Supply can have several different definitions. According to the Institute for Supply Management (ISM) [1], purchasing is defined as a major function of an organization that is responsible for acquisition of required materials, services, and equipment. executives nationwide. Membership of the Manufacturing Business Survey Committee is diversified diversified (di·verˑ·s by NAICS NAICS North American Industry Classification System , based on each industry's contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. , sporting goods Noun 1. sporting goods - sports equipment sold as a commodity commodity, trade good, good - articles of commerce sports equipment - equipment needed to participate in a particular sport , toys and office supplies Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as "paper work"). ). Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index Diffusion Index 1. A measure of the percentage of stocks that have advanced in price or are showing a positive momentum over a defined period. It is used in the technical analysis of stocks. 2. . Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive). The resulting single index number for those meeting the criteria for seasonal adjustments (PMI, New Orders, Production, Employment, Supplier Deliveries and Inventories) is then seasonally adjusted Seasonally adjusted Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year. to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The PMI is a composite index Composite Index A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time. Also known simply as a "composite". based on the seasonally adjusted diffusion indexes for five of the indicators with equal weights: New Orders, Production, Employment, Supplier Deliveries and Inventories. Diffusion indexes have the properties of leading indicators Leading Indicator A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not always accurate. and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI in excess of 41.1 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 41.1 percent, it is generally declining. The distance from 50 percent or 41.1 percent is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis In statistics, a mathematical method of modeling the relationships among three or more variables. It is used to predict the value of one variable given the values of the others. For example, a model might estimate sales based on age and gender. . Responses to Buying Policy reflect the percent reporting the current month's leadtime, the approximate weighted number of days ahead for which commitments are made for Production Materials; Capital Expenditures; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern. The Manufacturing ISM Report On Business([R]) is published monthly by the Institute for Supply Management[TM]. The Institute for Supply Management[TM], established in 1915, is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education. This report has been issued by the association since 1931, except for a four-year interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. during World War II. The full text version of the Manufacturing ISM Report On Business([R] )is posted on ISM's Web site at www.ism.ws on the first business day of every month after 10:10 a.m. (ET). The next Manufacturing ISM Report On Business([R]) featuring the May 2008 data will be released at 10:00 a.m. (ET) on Monday, June 2, 2008. |
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