The Purchasing Managers Index (PMI) reached a 2013 high in September, continuing the growing trend in the manufacturing sector for the 4th consecutive month. Climbing to 56.2 on the index, this is the highest PMI level since April of 2011, when the index topped out at 59.4.
The PMI is a report maintained by the Institute for Supply Management (ISM) that indicates conditions of the manufacturing industry. The PMI score is on a scale of 0-100, with a rating over 50 indicating better conditions than the previous month. Along with PMI, production and employment continued to grow at increasing rates, while new orders, exports, and imports grew at contracting rates.
Supplier deliveries continued to slow at an increasing rate for the third consecutive month and customer inventories dropped for a 22nd consecutive month, but is beginning to climb out of that hole, jumping from 42.5 to 43 on the index. Prices increased for the second consecutive month at the second highest rate (+2.5 percentage points), falling behind order backlogs (+3) which propelled their index level to 49.5, indicating slightly below average conditions, but rising. Inventories were the only index level to change trends, finishing the month at an even 50.0 from previous months below the average mark.
Even with the high rating and mostly positive signs, only 11 of the 18 manufacturing industries are reporting growth, compared to the 15 in August, 13 in July, and 12 in June. May was the last month that did not show growth in this capacity, indicating only 10 of the 18 industries reported growth, compared to April’s 14. May, 2013 was the lowest rated month (49.0) since May of 2009 (41.7) and the first to fall below the 50.0 median since November 2012 (49.9).
This record setting September helped bring the third quarter average up to 55.8, easily surpassing the Q1 average of 52.9 and Q2 average of 50.2. While the respondents have been mixed, with some industries claiming “Overall business is picking up”, others have experienced “Overall business is flat to down across the board”, these last few months are promoting cautiously optimistic forecasts going forward for the manufacturing industry and general US economy.
With the manufacturing industry on the rise, make sure to have a plan in place to capitalize on this growth. SBS Group has industry experts with proven solutions to help any manufacturing or distribution business. You can contact us for more information on the right solution for you.