Manufacturing Sector Expansion Continues in August - Modern Distribution Management

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Manufacturing Sector Expansion Continues in August

PMI down 1.6 percent from July, but growth continues for 32nd consecutive month.
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The manufacturing sector expanded in August, according to supply executives in the latest Manufacturing ISM Report on Business. The August PMI was 51.1 percent, a decrease of 1.6 percentage points from the July reading.

The New Orders Index registered 51.7 percent, a decrease of 4.8 percentage points from the reading of 56.5 percent in July. The Production Index registered 53.6 percent, 2.4 percentage points below the July reading of 56 percent. The Employment Index registered 51.2 percent, 1.5 percentage points below the July reading of 52.7 percent.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

Of the 18 manufacturing industries, 10 are reporting growth in August in the following order: Textile Mills; Furniture & Related Products; Paper Products; Nonmetallic Mineral Products; Chemical Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Fabricated Metal Products; Plastics & Rubber Products; and Machinery. The six industries reporting contraction in August – listed in order – are: Apparel, Leather & Allied Products; Primary Metals; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Computer & Electronic Products; and Transportation Equipment.

“The trend in the ISM index is largely consistent with other readings on manufacturing activity,” said Don Norman, director of economic studies at the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation. “As measured by the Federal Reserve Board’s index of manufacturing activity, output has bumped along in 2015, falling in January and February, edging up slightly for the next three months and then falling in June. Then in July manufacturing output increased. The Census Bureau reported that factory orders were up in June, but that increase followed two successive months in which they declined.  The overall picture is one of manufacturing activity moving in fits and starts as it expands at a slow – and possibly slowing – rate.”

For more information, visit www.ism.ws.

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