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Manufacturing continues to slow in September
October 10, 2001
Economic activity in the manufacturing sector declined for the 14th consecutive month in September while the overall economy grew for the fourth consecutive month, say the nation's purchasing and supply executives in the latest Manufacturing NAPM Report On Businessﾮ.
The report was issued today by Norbert J. Ore, C.P.M., chair of the National Association of Purchasing Management's Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation. 'The report measures monthly change and depicts the state of U.S. manufacturing in September. Some survey respondents, based on their comments, indicated that it was too early to fully determine the effects of the September 11th terrorist attacks. Overall the report indicates both continuing decline in manufacturing as has been the trend since August 2000, and the recent improvements in Production and New Orders which appeared to provide a basis for recovery in the sector.'
NAPM's Backlog of Orders Index indicates that order backlogs declined for the 17th consecutive month. NAPM's Supplier Deliveries Index continues to reflect faster deliveries. Manufacturing employment continued to decline in September as the index fell below the breakeven point (an index of 50 percent) for the 12th consecutive month. NAPM's Prices Index remained below 50 percent as manufacturers experienced lower prices for the seventh consecutive month. New Export Orders contracted in September after modest growth in August. September's Imports Index showed slight growth after eight consecutive months of decline.
NAPM's PMI is 47 percent in September, a decrease of 0.9 percentage point from the 47.9 percent reported in August. NAPM's Production Index declined 1.1 percentage points from 52.2 percent in August to 51.3 percent in September. NAPM's New Orders Index declined 2.8 percentage points from 53.1 percent in August to 50.3 percent in September. NAPM's Backlog of Orders Index slipped from 44.5 percent in August to 43 percent in September. NAPM's Supplier Deliveries Index was unchanged at 46.5 percent for September, still indicating faster deliveries during the month. The NAPM Employment Index is at 41.2 percent for September, an increase of 0.4 percentage point when compared to the 40.8 percent reported in August. NAPM's Prices Index in September is 36.3 percent, an increase of 2.4 percentage points from August's 33.9 percent.
NAPM's Inventories Index is at 38.9 percent indicating a slightly slower rate of inventory liquidation when compared to August's 37.7 percent. The special monthly question concerning customers' inventories of products purchased from their organizations was unchanged from August as 13 percent of the purchasing and supply executives felt they were too high, while 16 percent felt they were too low and 71 percent thought they were about right, and the diffusion index was again at 48.5 percent. NAPM's New Export Orders Index registered 45.9 percent, down from August's 51.9 percent. Imports of materials by manufacturers picked up as NAPM's Imports Index rose to 50.3 percent for the month, up from August's 49.7 percent.
'The overall picture is one of continued decline in manufacturing activity during the month of September,' added Ore. 'The manufacturing sector is in its 14th month of decline. A major sign of encouragement is that inventory liquidation appears to be slowing as both manufacturers and their customers are bringing inventory levels under control.'
Of the 20 industries in the manufacturing sector, eight reported growth: Leather; Petroleum; Paper; Food; Tobacco; Fabricated Metals; Glass, Stone, and Aggregate; and Miscellaneous (a preponderance of jewelry, toys, sporting goods, and musical instruments).
'No commodities were reported on the Short Supply List. Coal, Diesel Fuel, and Propylene are the commodities with reports of price increases. The commodities reported down in price are: Aluminum, Caustic Soda, Copper, Corrugated Containers, Energy, Methanol, Natural Gas, Paper, Plastic Resins, High Density Polyethylene, Polyethylene, Polyethylene Resin, Polypropylene, Steel and Zinc,' Ore stated.