The ISM NMI (Non-Manufacturing Index) came in at 53.8, which is down from 55.4 in May. The Business Activity Index was 58.1, down from 61.1 in May, and New Orders was 54.4, down from 57.1 in May. The employment index came in at 49.7, slightly below the growth threshold of 50. Here are some bullet points about [...]
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The ISM’s PMI came in at 58.4 for January, which is significantly higher than I expected (I was thinking it would be around 55). This is the highest number in five years, and it is a clear indicator that the recovery we started seeing in the fourth quarter is showing signs of sustainability. [...]
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Today the Institute for Supply Management (ISM) released their report on manufacturing activity in November. A few of the highlights:
Overall, I see these numbers as a relatively positive sign that the recovery in the manufacturing sector is continuing. Most analysts had expected the overall index (PMI) to come in around 55, but I was expecting a number closer to 50 due to the expiration of some government incentive programs such as cash for clunkers. 53.6 still indicates that the market is expanding, so people should not over-react to the drop from October to November. Furthermore, the increase in the New Orders Index and the drop in Inventories indicates that production should increase in December. I expect that December will have another index reading in excess of 53, marking the 5th consecutive month of expansion.
The one area of concern is the employment numbers. The drop to 50.8 indicates that manufacturing managers are being extremely cautious on hiring, waiting to insure that the recovery has firmly taken hold. Again, the growth in bookings should result in an increase in production in December, which should result in an improved employment picture. Look for the employment index to tick back up in December.
The Services Sector numbers are due out on Thursday, so we will report back then. The next big piece of data we are watching for manufacturing is the Fed’s report on Industrial Production and Utilization, which is due out in a few weeks.
Pat Furey is a Senior Category Manager in Ariba’s Global Sourcing Organization. Pat leads the team of global category managers covering direct materials and indirect goods and services.
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Following on the heels of his analysis of ISM’s October numbers, Pat Furey shared his team’s insights into the current state of the sourcing/procurement/category market. Pat also discussed some of the potentials risks and challenges that procurement departments are likely to encounter in the next 12 months.
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
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Senior Category Manager and SupplyExcellence contributor Pat Furey shared his analysis of the October ISM data for manufacturing and services.
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
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