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PMI® at 60.2; June Manufacturing ISM® Report On Business®

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PMI® at 60.2; June Manufacturing ISM® Report On Business®

PR Newswire

New Orders, Production, and Employment Growing

Supplier Deliveries Slowing at Faster Rate; Backlog Growing

Raw Materials Inventories Growing; Customers' Inventories Too Low

Prices Increasing at Slower Rate; Exports and Imports Growing

TEMPE, Ariz., July 2, 2018 /PRNewswire/ -- Economic activity in the manufacturing sector expanded in June, and the overall economy grew for the 110th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: "The June PMI® registered 60.2 percent, an increase of 1.5 percentage points from the May reading of 58.7 percent. The New Orders Index registered 63.5 percent, a decrease of 0.2 percentage point from the May reading of 63.7 percent. The Production Index registered 62.3 percent, a 0.8 percentage point increase compared to the May reading of 61.5 percent. The Employment Index registered 56 percent, a decrease of 0.3 percentage point from the May reading of 56.3 percent. The Supplier Deliveries Index registered 68.2 percent, a 6.2 percentage point increase from the May reading of 62 percent. The Inventories Index registered 50.8 percent, an increase of 0.6 percentage point from the May reading of 50.2 percent. The Prices Index registered 76.8 percent in June, a 2.7 percentage point decrease from the May reading of 79.5 percent, indicating higher raw materials prices for the 28th consecutive month.

"Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60 percent or above for the 14th straight month, and the Customers' Inventories Index remaining low. The Backlog of Orders Index continued to expand, reading at 60 percent of higher for the third consecutive month. Consumption, described as production and employment, continues to expand in spite of labor, skill and material shortages. Inputs, expressed as supplier deliveries, inventories and imports, had expansion increases, due primarily to negative supply chain issues. Lead-time extensions, steel and aluminum disruptions, supplier labor issues, and transportation difficulties continue. Export orders expanded at higher rates. Price pressure remains strong, but the index saw its first expansion softening since November 2017. Demand remains robust, but the nation's employment resources and supply chains continue to struggle. Respondents are overwhelmingly concerned about how tariff related activity is and will continue to affect their business," says Fiore.

Of the 18 manufacturing industries, 17 reported growth in June, in the following order: Textile Mills; Wood Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; Transportation Equipment; Furniture & Related Products; Machinery; Primary Metals; Miscellaneous Manufacturing; Chemical Products; Petroleum & Coal Products; and Plastics & Rubber Products. No industry reported a decrease in June compared to May.

WHAT RESPONDENTS ARE SAYING

  • "Business is strong in all regions. Materials are tight. Trucking continues to be a major challenge." (Chemical Products)
  • "Strong economic growth continues to put pressure/strain on capacity, lead time, availability and pricing across a broadening array of commodities and components." (Computer & Electronic Products)
  • "U.S. tariff policy and lack of predictability, along with [the] threat of trade wars, [is] causing general business instability and [is a] drag on growth for investments." (Electrical Equipment, Appliances & Components)
  • "Electronic component supply issues continue to disrupt production." (Transportation Equipment)
  • "We export to more than 100 countries. We are preparing to shift some customer responsibilities among manufacturing plants and business units due to trade issues (for example, we'll shift production for China market from the U.S. to our Canadian plant to avoid higher tariffs). Within our company, there is a sense of uncertainty due to potential trade wars." (Food, Beverage & Tobacco Products)
  • "The Section 232 steel tariffs are now impacting domestic steel prices and capacity. Base steel prices have already increased 20 percent since March." (Fabricated Metal Products)
  • "Transportation costs are going through the roof right now, which definitely impacts the decisions we're making with regard to quantities we're bringing in versus truckload and LTL." (Furniture & Related Products)
  • "The economy and product demand still continue to be strong. Having trouble finding people [to fill] blue collar positions. Lead times for parts and materials are moving out, and we are seeing commodity cost pressures increases with the threat of tariffs. Additionally, suppliers are asking for more price increases." (Machinery)
  • "The uncertainty of U.S. tariffs and the Canada/Mexico/E.U. retaliatory tariffs continues to cloud strategic planning efforts. Contingency planning (for tariffs) is consuming large amounts of manpower that could be used for more productive projects. The tariffs are improving margins in our raw material businesses; however, our businesses which are further up the supply chain are seeing significant inflation." (Miscellaneous Manufacturing)
  • "The steel tariffs continue to drive uncertainty. Projects and services using steel have limited days that prices are good for. Trucking is tight, requiring advanced planning and increasing costs." (Paper Products)

 

MANUFACTURING AT A GLANCE

June 2018

Index

Series
Index

Jun

Series
Index

May

Percentage

Point

Change

Direction

Rate of
Change

Trend*
(Months)

PMI®

60.2

58.7

+1.5

Growing

Faster

22

New Orders

63.5

63.7

-0.2

Growing

Slower

30

Production

62.3

61.5

+0.8

Growing

Faster

22

Employment

56.0

56.3

-0.3

Growing

Slower

21

Supplier Deliveries

68.2

62.0

+6.2

Slowing

Faster

21

Inventories

50.8

50.2

+0.6

Growing

Faster

6

Customers' Inventories

39.7

39.6

+0.1

Too Low

Slower

21

Prices

76.8

79.5

-2.7

Increasing

Slower

28

Backlog of Orders

60.1

63.5

-3.4

Growing

Slower

17

New Export Orders

56.3

55.6

+0.7

Growing

Faster

28

Imports

59.0

54.1

+4.9

Growing

Faster

17

OVERALL ECONOMY

Growing

Faster

110

Manufacturing Sector

Growing

Faster

22

Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price
Aluminum (20); Aluminum Based Products (2); Butadiene; Capacitors; Caustic Soda (12); Copper (8); Corrugate (21); Corrugated Boxes; Diesel; Freight (5); Hydraulic Hoses/Fittings; Hydraulic Valves; Isopropyl Alcohol; Natural Gas; Nylon; Packaging Materials; Paper (2); Phosphoric Acid; Plastic Components; Plastic Resins; Polypropylene; Resistors (2); Rubber; Solvents; Steel — Cold Rolled; Steel — Galvanized; Steel — Hot Rolled (19); Steel — Stainless (3); Steel Based Products (2); Steel Tubing; and Wood Pallets.

Commodities Down in Price
None.

Commodities in Short Supply
Aluminum (2); Capacitors (12); Electrical Components (3); Electronic Components (2); Freight (2); Resistors (8); Steel Based Products (2); and Steel – Hot Rolled (3).

The number of consecutive months the commodity is listed is indicated after each item.

JUNE 2018 MANUFACTURING INDEX SUMMARIES

PMI®
Manufacturing expanded in June as the PMI® registered 60.2 percent, an increase of 1.5 percentage points from the May reading of 58.7 percent. "This indicates strong growth in manufacturing for the 22nd consecutive month, led by continued expansion in new orders, production and employment. The PMI® reached its highest level since February 2018, when it reached 60.8 points. However, inventories continue to struggle to maintain expansion levels as a result of supplier deliveries slowing further," says Fiore. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI® above 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the June PMI® indicates growth for the 110th consecutive month in the overall economy and the 22nd straight month of growth in the manufacturing sector. "The past relationship between the PMI® and the overall economy indicates that the PMI® for June (60.2 percent) corresponds to a 5.2 percent increase in real gross domestic product (GDP) on an annualized basis."

THE LAST 12 MONTHS

Month

PMI®


Month

PMI®

Jun 2018

60.2


Dec 2017

59.3

May 2018

58.7


Nov 2017

58.2

Apr 2018

57.3


Oct 2017

58.5

Mar 2018

59.3


Sep 2017

60.2

Feb 2018

60.8


Aug 2017

59.3

Jan 2018

59.1


Jul 2017

56.5

Average for 12 months – 59.0

High – 60.8

Low – 56.5

New Orders
ISM®'s New Orders Index registered 63.5 percent in June, which is a decrease of 0.2 percentage point when compared to the 63.7 percent reported for May, indicating growth in new orders for the 30th consecutive month. "New orders expansion continued at high levels, with the index at or above 60 percent for the 14th straight month and the rolling three month average gaining 0.5 point. Customer inventories remain too low, and the Backlog of Orders Index is at 60 percent of higher for the third consecutive month," says Fiore. A New Orders Index above 52.4 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

Sixteen of 18 industries reported growth in new orders in June, listed in the following order: Textile Mills; Furniture & Related Products; Wood Products; Printing & Related Support Activities; Transportation Equipment; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Electrical Equipment, Appliances & Components; Machinery; Primary Metals; Miscellaneous Manufacturing; and Paper Products. The only industry reporting a decrease in new orders in June compared to May is Apparel, Leather & Allied Products.

New Orders

%Higher

%Same

%Lower

Net

Index

Jun 2018

39.7

53.0

7.3

+32.5

63.5

May 2018

37.5

56.3

6.2

+31.3

63.7

Apr 2018

42.4

49.5

8.1

+34.3

61.2

Mar 2018

43.3

48.0

8.6

+34.7

61.9

Production
ISM®'s Production Index registered 62.3 percent in June, which is an increase of 0.8 percentage point when compared to the 61.5 percent reported for May, indicating growth in production for the 22nd consecutive month. "Production expansion continues, with the index recording the second straight month of expansion growth at 60 percent or above. Labor constraints and, more significantly, supply chain disruptions continue to limit full production potential," says Fiore. An index above 51.5 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.

The 16 industries reporting growth in production during the month of June — listed in order — are: Textile Mills; Furniture & Related Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Wood Products; Chemical Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage & Tobacco Products; Primary Metals; Transportation Equipment; Computer & Electronic Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Machinery; and Paper Products. The only industry reporting a decrease in production in June compared to May is Apparel, Leather & Allied Products.

Production

%Higher

%Same

%Lower

Net

Index

Jun 2018

38.7

51.0

10.3

+28.4

62.3

May 2018

35.8

55.2

8.9

+26.9

61.5

Apr 2018

33.6

58.5

8.0

+25.6

57.2

Mar 2018

36.1

55.7

8.2

+27.9

61.0

Employment
ISM®'s Employment Index registered 56 percent in June, a decrease of 0.3 percentage point when compared to the May reading of 56.3 percent. This indicates growth in employment in June for the 21st consecutive month. "Employment maintained a modestly strong level of expansion and supported production growth during the month. Respondents noted labor market issues as a constraint to their production and their suppliers' production capacity," says Fiore. An Employment Index above 50.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, the 13 reporting employment growth in June — listed in order — are: Textile Mills; Paper Products; Computer & Electronic Products; Transportation Equipment; Petroleum & Coal Products; Primary Metals; Machinery; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Fabricated Metal Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; and Chemical Products. No industry reported a decrease in employment in June compared to May.

Employment

%Higher

%Same

%Lower

Net

Index

Jun 2018

29.0

59.6

11.3

+17.7

56.0

May 2018

27.6

61.2

11.3

+16.3

56.3

Apr 2018

23.1

66.8

10.2

+12.9

54.2

Mar 2018

22.9

66.3

10.8

+12.2

57.3

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was markedly slower in June, as the Supplier Deliveries Index registered 68.2 percent. This is 6.2 percentage points higher than the 62 percent reported for May. "This is the 21st straight month of slowing supplier deliveries that continue to constrain production growth and inventory expansion. Lead-time extensions for production materials, transportation delays, and ongoing uncertainty in the steel and aluminum markets continue to restrict production output. The index recorded its highest reading since May 2004, when it reached 68.3 percent," says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The 15 industries reporting slower supplier deliveries in June — listed in order — are: Wood Products; Textile Mills; Computer & Electronic Products; Fabricated Metal Products; Machinery; Apparel, Leather & Allied Products; Paper Products; Petroleum & Coal Products; Transportation Equipment; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Chemical Products; and Primary Metals. No industries reported faster supplier deliveries in June compared to May.

Supplier Deliveries

%Slower

%Same

%Faster

Net

Index

Jun 2018

38.7

58.9

2.4

+36.3

68.2

May 2018

29.9

65.7

4.4

+25.5

62.0

Apr 2018

25.6

71.3

3.2

+22.4

61.1

Mar 2018

28.4

65.9

5.7

+22.7

60.6

Inventories*
The Inventories Index registered 50.8 percent in June, which is an increase of 0.6 percentage point when compared to the 50.2 percent reported for May, indicating raw materials inventories grew in June. "Suppliers were not able to maintain desired inventory expansion levels consistent with production demands for the fourth straight month. Volatile supplier lead times and freight disruptions continue to impact inventory accounts," says Fiore. An Inventories Index greater than 43 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The 10 industries reporting higher inventories in June — listed in order — are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Wood Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing; Primary Metals; and Machinery. The three industries reporting lower inventories in June are: Transportation Equipment; Chemical Products; and Computer & Electronic Products.

Inventories

%Higher

%Same

%Lower

Net

Index

Jun 2018

20.7

60.2

19.1

+1.6

50.8

May 2018

17.7

65.1

17.3

+0.4

50.2

Apr 2018

20.4

65.0

14.6

+5.8

52.9

Mar 2018

22.1

66.7

11.1

+11.0

55.5

Customers' Inventories*
ISM®'s Customers' Inventories Index registered 39.7 percent in June, which is 0.1 percentage point higher than the 39.6 percent reported for May, indicating that customers' inventory levels were still considered too low in June. "Customers' inventory levels are too low for the 21st consecutive month, which continues to support an overall positive environment for production output growth in the near term," says Fiore.

No manufacturing industries reported customers' inventories as too high during the month of June. The 14 industries reporting customers' inventories as too low during June — listed in order — are: Wood Products; Apparel, Leather & Allied Products; Plastics & Rubber Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Miscellaneous Manufacturing; Fabricated Metal Products; Computer & Electronic Products; Paper Products; Food, Beverage & Tobacco Products; and Chemical Products.

Customers'
Inventories

%
Reporting

%Too
High

%About
Right

%Too
Low

Net

Index

Jun 2018

79

5.3

68.9

25.8

-20.6

39.7

May 2018

80

7.3

64.5

28.2

-20.9

39.6

Apr 2018

87

9.7

69.2

21.1

-11.4

44.3

Mar 2018

80

7.8

68.5

23.7

-16.0

42.0

Prices*
The ISM® Prices Index registered 76.8 percent in June, a decrease of 2.7 percentage points from the May level of 79.5 percent, indicating an increase in raw materials prices for the 28th consecutive month. In June, 56.9 percent of respondents reported paying higher prices, 3.3 percent reported paying lower prices, and 39.9 percent of supply executives reported paying the same prices as in May. "The price increases across all industry sectors continue. The Business Survey Committee noted price increases in metals (all steels, steel components, aluminum and copper), chemicals, corrugate, freight, electronic components, fuels, plastics and wood products. Shortages continue in aluminum, electronics components, steels, steel-based products, electrical components and freight," says Fiore. A Prices Index above 52.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

All 18 industries reported paying increased prices for raw materials in June, in the following order: Apparel, Leather & Allied Products; Textile Mills; Printing & Related Support Activities; Fabricated Metal Products; Furniture & Related Products; Paper Products; Machinery; Chemical Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Nonmetallic Mineral Products; Primary Metals; Wood Products; Miscellaneous Manufacturing; Transportation Equipment; Food, Beverage & Tobacco Products; Petroleum & Coal Products; and Plastics & Rubber Products.

Prices

%Higher

%Same

%Lower

Net

Index

Jun 2018

56.9

39.9

3.3

+53.6

76.8

May 2018

62.2

34.7

3.1

+59.1

79.5

Apr 2018

61.2

36.2

2.6

+58.6

79.3

Mar 2018

57.1

42.1

0.8

+56.2

78.1

Backlog of Orders*
ISM®'s Backlog of Orders Index registered 60.1 percent in June, which is 3.4 percentage points lower than the 63.5 percent reported in May, indicating growth in order backlogs for the 17th consecutive month. "Backlog expansion continued during the period, as the index recorded the third straight month at over 60 percent. Strong backlog, extremely low levels of customer inventory and continued strong new order expansion indicate that production requirements should remain robust into Q3," says Fiore.

The 12 industries reporting growth in order backlogs in June — listed in order — are: Printing & Related Support Activities; Computer & Electronic Products; Textile Mills; Petroleum & Coal Products; Paper Products; Fabricated Metal Products; Transportation Equipment; Machinery; Primary Metals; Furniture & Related Products; Chemical Products; and Plastics & Rubber Products. The two industries reporting a decrease in order backlogs during June are: Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products.

Backlog of
Orders

%
Reporting

%Higher

%Same

%Lower

Net

Index

Jun 2018

90

32.8

54.6

12.6

+20.2

60.1

May 2018

89

34.8

57.5

7.7

+27.1

63.5

Apr 2018

88

32.3

59.3

8.3

+24.0

62.0

Mar 2018

87

32.1

55.4

12.5

+19.7

59.8

New Export Orders*
ISM®'s New Export Orders Index registered 56.3 percent in June, an increase of 0.7 percentage point when compared to the 55.6 percent reported for May, indicating growth in new export orders for the 28th consecutive month. "All six big industry sectors continued to expand export activity during the period, in spite of comments related to reciprocal tariff activity," says Fiore.

The 10 industries reporting growth in new export orders in June — listed in order — are: Furniture & Related Products; Fabricated Metal Products; Chemical Products; Paper Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Machinery; and Transportation Equipment. The two industries reporting a decrease in new export orders in June as compared to May are: Primary Metals; and Electrical Equipment, Appliances & Components. Six industries reported no change in new export orders in June compared to May.

New Export
Orders

%
Reporting

%Higher

%Same

%Lower

Net

Index

Jun 2018

79

15.8

81.1

3.1

+12.6

56.3

May 2018

79

17.3

76.5

6.2

+11.2

55.6

Apr 2018

79

18.6

78.2

3.2

+15.4

57.7

Mar 2018

80

22.6

72.0

5.3

+17.3

58.7

Imports*
ISM®'s Imports Index registered 59 percent in June, an increase of 4.9 percentage points when compared to the 54.1 percent reported for May, indicating that imports grew in June for the 17th consecutive month. "Imports continued to expand to support production demand. Several panelists commented that import pace has increased due to tariff-related concerns," says Fiore.

The 14 industries reporting growth in imports during the month of June — listed in order — are: Printing & Related Support Activities; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Primary Metals; Miscellaneous Manufacturing; Petroleum & Coal Products; Furniture & Related Products; Chemical Products; Transportation Equipment; Food, Beverage & Tobacco Products; Plastics & Rubber Products; and Machinery. The only industry that reported a decrease in imports during June compared to May is Apparel, Leather & Allied Products.

Imports

%
Reporting

%Higher

%Same

%Lower

Net

Index

Jun 2018

85

24.3

69.3

6.4

+17.9

59.0

May 2018

85

17.1

74.0

8.9

+8.2

54.1

Apr 2018

86

21.6

72.4

6.0

+15.6

57.8

Mar 2018

84

26.1

67.1

6.7

+19.4

59.7

*The Inventories, Customers' Inventories, Prices, Backlog of Orders, New Export Orders and Imports Indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy
Average commitment lead time for Capital Expenditures was unchanged in June at 143 days. Average lead time for Production Materials decreased by one day, to 69 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies decreased by two days, to 31 days.

Percent Reporting


Capital Expenditures

Hand-to-
Mouth

30
Days

60
Days

90
Days

6
Months

1 Year+

Average
Days

Jun 2018

21

7

9

17

26

20

143

May 2018

19

6

10

19

27

19

143

Apr 2018

21

5

10

21

21

22

145

Mar 2018

22

5

12

15

29

17

139









Production Materials

Hand-to-
Mouth

30
Days

60
Days

90
Days

6
Months

1 Year+

Average
Days

Jun 2018

11

33

29

16

7

4

69

May 2018

13

30

26

20

7

4

70

Apr 2018

10

35

28

17

7

3

67

Mar 2018

13

37

23

18

6

3

63









MRO Supplies

Hand-to-
Mouth

30
Days

60
Days

90
Days

6
Months

1 Year+

Average
Days

Jun 2018

36

43

14

5

2

0

31

May 2018

32

44

16

7

1

0

33

Apr 2018

35

41

15

7

2

0

35

Mar 2018

39

37

17

4

3

0

34

About This Report
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., 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 June 2018.

The data presented herein is obtained from a survey of manufacturing supply executives 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. The data 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® is based on data compiled from purchasing and supply executives nationwide. The composition of the Manufacturing Business Survey Committee is stratified according to the North American Industry Classification System (NAICS) and each of the following NAICS-based industry's contribution to gross domestic product (GDP): 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, sporting goods, toys and office supplies). The data are weighted based on each industry's contribution to GDP. Beginning in January 2018, computation of the indexes is accomplished utilizing unrounded numbers.

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. 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 and Supplier Deliveries) is then seasonally adjusted 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 subject annually to relatively minor changes when conditions warrant them. The PMI® is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), and Inventories.

Diffusion indexes have the properties of leading indicators 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® above 43.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.2 percent, it is generally declining. The distance from 50 percent or 43.2 percent is indicative of the extent 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. The Manufacturing ISM® Report On Business® survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM® then compiles the report for release on the first business day of the following month.

The industries reporting growth, as indicated in the Manufacturing ISM® Report On Business® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; 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.

ISM ROB Content
The Institute for Supply Management® ("ISM") Report On Business® (both Manufacturing and Non-Manufacturing) ("ISM ROB") contains information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content (collectively, "Content") of ISM ("ISM ROB Content"). ISM ROB Content is protected by copyright, trademark, trade secret, and other laws, and as between you and ISM, ISM owns and retains all rights in the ISM ROB Content. ISM hereby grants you a limited, revocable, nonsublicensable license to access and display on your individual device the ISM ROB Content (excluding any software code) solely for your personal, non-commercial use. The ISM ROB Content shall also contain Content of users and other ISM licensors. Except as provided herein or as explicitly allowed in writing by ISM, you shall not copy, download, stream, capture, reproduce, duplicate, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any ISM ROB Content.

Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, datastreams, timeseries variables, fonts, icons, link buttons, wallpaper, desktop themes, on-line postcards, montages, mash-ups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. This prohibition applies regardless of whether the derivative works or materials are sold, bartered, or given away. You shall not either directly or through the use of any device, software, internet site, web-based service, or other means remove, alter, bypass, avoid, interfere with, or circumvent any copyright, trademark, or other proprietary notices marked on the Content or any digital rights management mechanism, device, or other content protection or access control measure associated with the Content including geo-filtering mechanisms. Without prior written authorization from ISM, you shall not build a business utilizing the Content, whether or not for profit.

You shall not create, recreate, distribute, incorporate in other work, or advertise an index of any portion of the Content unless you receive prior written authorization from ISM. Requests for permission to reproduce or distribute ISM ROB Content can be made by contacting in writing at: ISM Research, Institute for Supply Management, 309 W. Elliot Road, Suite 113, Tempe, Arizona 85284-1556, or by emailing kcahill@instituteforsupplymanagement.org. Subject: Content Request.

ISM shall not have any liability, duty, or obligation for or relating to the ISM ROB Content or other information contained herein, any errors, inaccuracies, omissions or delays in providing any ISM ROB Content, or for any actions taken in reliance thereon. In no event shall ISM be liable for any special, incidental, or consequential damages, arising out of the use of the ISM ROB. Report On Business®, PMI®, and NMI® are registered trademarks of Institute for Supply Management®. Institute for Supply Management® and ISM® are registered trademarks of Institute for Supply Management, Inc.

About Institute for Supply Management®
Institute for Supply Management® (ISM®) serves supply management professionals in more than 90 countries. Its 50,000 members around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM leads the profession through the ISM Report On Business®, its highly regarded certification programs and the ISM Mastery Model®. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM® Report On Business® is posted on ISM®'s website at www.ismrob.org on the first business day* of every month after 10:00 a.m. ET.

The next Manufacturing ISM® Report On Business® featuring July 2018 data will be released at 10:00 a.m. ET on Wednesday, August 1, 2018.

*Unless the New York Stock Exchange is closed.

Contact:

Kristina Cahill


Report On Business® Analyst


ISM®, ROB/Research Manager


Tempe, Arizona


+1 480.455.5910


Email: kcahill@instituteforsupplymanagement.org

 

Institute for Supply Management logo. (PRNewsFoto/Institute for Supply Management)

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/pmi-at-60-2-june-manufacturing-ism-report-on-business-300674956.html

SOURCE Institute for Supply Management

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