Subscribe to our free, weekly email newsletter!


ISM reports steady manufacturing growth in March

By Jeff Berman, Group News Editor
April 01, 2011

Manufacturing activity remains on very strong footing, according to data released by the Institute for Supply Management (ISM).

In its March Manufacturing Report on Business, the ISM reported that the index it uses to measure the manufacturing sector—known as the PMI—was 61.2 percent, a 0.2 percent decline from February’s 61.4. February matched the highest PMI level since May 2004.

Any reading 50 or higher represents economic growth, and March is the 22nd consecutive month economic growth has occurred, according to the report. But the 0.2 percent decline snaps a seventh straight month of month-over-month manufacturing growth.

“The recent trend of rapid growth in the manufacturing sector continued in March, as the PMI registered above 60 percent for the third consecutive month,” said Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee, in a statement.  “The component indexes of the PMI remain at very positive levels and signal strong sector performance in the first quarter. While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices. Many manufacturers indicate the prices they have to pay for inputs are rising, and there is concern about the impact of higher prices on their margins.”

New Orders at 63.3 were down 4.7 percent from February, and Production at 69.0 was up 2.7 percent. Employment at 63.0 was down 1.5 percent. Inventories were down 1.4 percent at 47.4, and Customers’ Inventories at 39.5 were off by 0.5 percent. Backlog of orders was down 6.5 percent at 52.5, and Prices at 85.0 percent dropped 0.5 percent.

In an interview, Ore said that even with a 0.2 percent decline, the manufacturing sector is growing at a similar rate to where it has been the last few months.

“The remarkable thing is we have averaged over 60 for the entire first quarter, which indicates a strong amount of momentum,” said Ore. “The first quarter is usually not this strong. It is a very strong performance. If the rest of the economy was behaving like manufacturing, things would be very strong right now, especially in terms of job creation.

With New Orders down nearly 5 percent, Ore explained that February New Orders at 68.0 “were absolutely off the charts and had to come back to reality a bit. And Production has subsequently increased due to gains in New Orders, too.

Export growth, explained Ore, also plays a large factor in New Orders and Production data. February exports at 62.5 drove up that month’s New Orders data at 68.0, and exports were down 6.5 percent in March at 56.0, which was a steeper decline than March’s New Orders at 4.7 percent.

Despite the sequential decline, the current New Orders reading represents a very positive indication for the manufacturing sector going forward.

On the Employment front, even though March fell 1.5 percent, Ore explained that manufacturers are very willing to hire now where there is a need for it.

“They are filling lots of positions for supply chain jobs, which are picking up dramatically,” he said. “Some of those positions were cut back during the recession and are now being replaced.”

For related articles, please click here.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

As was the case for the second quarter, third quarter earnings results for publicly-traded less-than-truckload (LTL) carriers are again strong. Signs of solid earnings results from carriers that have posted earnings to date include tonnage increases, gains in weight per shipment and average daily shipments, higher yield, and revenue per hundredweight.

While the holiday season is known to bring good tidings and cheer to all, it may also come with another thing that is not so pleasant: higher rate freights. That was the thesis of a commentary written by Mark Montague, industry pricing analyst and chief market-watcher for DAT, a Portland, Ore.-based subsidiary of TransCore.

Earlier this week, FedEx said it is expanding its International First service for early deliveries with the addition of 31 new origin countries, which will bring the total number of origin markets for the service to 97.

Monday, December 22 is pegged as UPS's peak delivery day, as the company expects to deliver more than 34 million packages that day, adding that it expects to see six days in December top last year’s peak shipment day delivery record of 31 million packages.

The time has come again for less-than-truckload (LTL) general rate increases (GRI), with various carriers recently announced their respective rate hikes in recent days.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA