The Institute for Supply Management (ISM) has released its monthly Purchasing Managers Index (PMI) for September, and the story told is another positive one with the PMI at 60.8%, an increase of two percentage points from the August reading of 58.8%.
A reading above 50% indicates the manufacturing economy is generally expanding; below 50% indicates it is generally contracting.
A PMI above 50%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the September PMI indicates growth for the 100th consecutive month in the overall economy, and indicates growth in the manufacturing sector for the 13th consecutive month — the highest reading since May 2004, when the index registered 61.4%.
“Comments from the panel reflect expanding business conditions, with new orders, production, employment, order backlogs and export orders all growing in September; as well as, supplier deliveries slowing (improving) and inventories growing at a slower rate during the period. The Customers’ Inventories Index remains at low levels,” said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee,.
The New Orders Index registered 64.6%, an increase of 4.3 percentage points from the August reading of 60.3%. The Production Index registered 62.2%, a 1.2 percentage point increase compared to the August reading of 61%. The Employment Index registered 60.3%, an increase of 0.4 percentage point from the August reading of 59.9%. The Supplier Deliveries Index registered 64.4%, a 7.3 percentage point increase from the August reading of 57.1%. The Inventories Index registered 52.5%, a decrease of 3 percentage points from the August reading of 55.5%. The Prices Index registered 71.5% in September, a 9.5 percentage point increase from the August level of 62%, indicating higher raw materials prices for the 19th consecutive month.
Of the 18 manufacturing industries, 17 reported growth in September, in the following order: Textile Mills; Machinery; Nonmetallic Mineral Products; Transportation Equipment; Plastics & Rubber Products; Paper Products; Wood Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; Petroleum & Coal Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; and Primary Metals.
One industry, Furniture & Related Products, reported contraction in September compared to August.