Latest Slump in PMI May Have Impact on Manufacturer’s Supply Chains

Modest gains can resume after the adjustment period, but it looks like a long, cool summer in the manufacturing sector
By Patrick Burnson, Executive Editor
June 04, 2013 - SCMR Editorial

When the ISM reading of 49.0 is combined with a purchasing managers’ manufacturing index (PMI) score of 52.3, the net is so close to neutral to not call it flat, observe economists.

“That is clearly superior to outright, and persistent, declines in Europe and China, but is a clear downshifting from far more robustness in late 2012 and early 2013,” said IHS Global Insight U.S. economist Michael Montgomery. “Becalmed still beats sinking.”

According to Montgomery, more tepid scores oscillating around 50 loom on the horizon through summer as the goods side of the ledger adjusts to ongoing malaise in Europe, and twin fiscal drags of tax hikes and sequester spending cuts weigh on demand for hard goods.

“Modest gains can resume after the adjustment period, but it looks like a long, cool summer in the manufacturing sector,” he added.

The manufacturing sector turned mildly negative in May, with the ISM-manufacturing index cooling to 49.0 from 50.7, its first sub-50 score of 2013 and its worst showing since June 2009. New orders and production triggered both the drop versus April and the sub-50 reading at 48.8 and 48.6, respectively. Few scores beat 50.

Prices scored a 49.5 for the first sub-50 reading since last July; oil prices probably pushed both the May 2013 and July 2012 readings below water, but other traded commodities are under downward pressure from softness in China and Europe.



About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(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

While the Port of Oakland agrees that Saturday gate operations might ease congestion, they have a few "concerns" of their own

The four international marine container terminals at the Port of Oakland have announced they are developing a program to operate their terminal gates on Saturdays to reduce weekday congestion at the port.

Private fleet managers are facing a remarkable set of challenges in today's demanding business environment. The "from any place at any time" omni-channel fulfillment mindset is just one significant development that companies have had to adapt to in their quest to keep customers and business partners happy.

This is the first guaranteed weekly service direct to the U.S. from Singapore as part of the company’s initiative to enhance its LCL offerings serving Trans-pacific needs.

The city and Port of New Orleans have been roaring back since the catastrophic Hurricane Katrina struck ten years ago.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

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