PMI(R) at 53.2%; November Manufacturing ISM(R) Report On Business(R); New Orders, Production and Employment Growing; Inventories Contracting; Supplier Deliveries Slowing

PR Newswire

TEMPE, Ariz., Dec. 1, 2016

TEMPE, Ariz., Dec. 1, 2016 /PRNewswire/ -- Economic activity in the manufacturing sector expanded in November, and the overall economy grew for the 90th consecutive month, say the nation's supply executives in the latest Manufacturing ISM(R) Report On Business(R) .

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management(R) (ISM(R) ) Manufacturing Business Survey Committee. "The November PMI(R) registered 53.2 percent, an increase of 1.3 percentage points from the October reading of 51.9 percent. The New Orders Index registered 53 percent, an increase of 0.9 percentage point from the October reading of 52.1 percent. The Production Index registered 56 percent, 1.4 percentage points higher than the October reading of 54.6 percent. The Employment Index registered 52.3 percent, a decrease of 0.6 percentage point from the October reading of 52.9 percent. Inventories of raw materials registered 49 percent, an increase of 1.5 percentage points from the October reading of 47.5 percent. The Prices Index registered 54.5 percent in November, the same reading as in October, indicating higher raw materials prices for the ninth consecutive month. Comments from the panel cite increasing demand, some tightness in the labor market and plans to reduce inventory by the end of the year."

Of the 18 manufacturing industries, 11 are reporting growth in November in the following order: Miscellaneous Manufacturing; Petroleum & Coal Products; Paper Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; and Primary Metals. The six industries reporting contraction in November -- listed in order -- are: Printing & Related Support Activities; Wood Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Furniture & Related Products.

WHAT RESPONDENTS ARE SAYING ...

-- "Raw materials have been rather flat. Ramping up for year-end and

reducing inventory is main supply chain goal at this time." (Chemical

Products)

-- "Strong manufacturing numbers in anticipation of strong year-end

bookings." (Computer & Electronic Products)

-- "Business is still steady. We are foregoing our shutdown over Christmas

break due to an increase in customer orders." (Plastics & Rubber

Products)

-- "Heading into 2017, our business levels look pretty consistent compared

to 2016." (Primary Metals)

-- "Sector remains strong, orders and forecasts are consistent and demand

outlook is positive." (Food, Beverage & Tobacco Products)

-- "New spec buildings going up in our area. Local companies adding

additional production space which equates to higher employment."

(Machinery)

-- "Business conditions are good. Labor market is tightening such that it is

difficult to staff to completely fulfill production demand."

(Miscellaneous Manufacturing)

-- "We are seeing an upswing in customer Requests for Quotations this month;

this is a positive sign for our business." (Textile Mills)

-- "Continued strong seasonal demand for product." (Nonmetallic Mineral

Products)

-- "2017 is looking to be a very busy year." (Fabricated Metal Products)

MANUFACTURING AT A GLANCE

November 2016

Series Series Percentage

Index Index Point Rate of Trend*

Index Nov Oct Change Direction Change (Months)

PMI(R) 53.2 51.9 +1.3 Growing Faster 3

New Orders 53.0 52.1 +0.9 Growing Faster 3

Production 56.0 54.6 +1.4 Growing Faster 3

Employment 52.3 52.9 -0.6 Growing Slower 2

Supplier

Deliveries 55.7 52.2 +3.5 Slowing Faster 7

Inventories 49.0 47.5 +1.5 Contracting Slower 17

Customers'

Inventories 49.0 49.5 -0.5 Too Low Faster 2

Prices 54.5 54.5 0.0 Increasing Same 9

Backlog of

Orders 49.045.5 +3.5 Contracting Slower 5

New Export

Orders 52.0 52.5 -0.5 Growing Slower 9

Imports 50.5 52.0 -1.5 Growing Slower 2

OVERALL ECONOMY Growing Faster 90

Manufacturing Sector Growing Faster 3

Manufacturing ISM(R) Report On Business(R) 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*; Caustic Soda; Copper; Corrugate (2); Corrugated Boxes; Linerboard; Methanol (2); Scrap Steel; Stainless Steel (8); Steel (11); and Steel -- Cold Rolled.

Commodities Down in Price

Aluminum* (2); Natural Gas; Plastic Resins; Propylene; and Steel -- Hot Rolled (4).

Commodities in Short Supply

None (2).

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

*Reported as both up and down in price.

NOVEMBER 2016 MANUFACTURING INDEX SUMMARIES

PMI(R) Manufacturing expanded in November as the PMI(R) registered 53.2 percent, an increase of 1.3 percentage points from the October reading of 51.9 percent, indicating growth in manufacturing for the third consecutive month. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI(R) above 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the November PMI(R) indicates growth for the 90th consecutive month in the overall economy, and indicates growth in the manufacturing sector for the third consecutive month. Holcomb stated, "The past relationship between the PMI(R) and the overall economy indicates that theaverage PMI(R) for January through November (51.2 percent) corresponds to a 2.5 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI(R) for November (53.2 percent) is annualized, it corresponds to a 3.2 percent increase in real GDP annually."

THE LAST 12 MONTHS

Month PMI(R) Month PMI(R)

Nov 2016 53.2 May 2016 51.3

Oct 2016 51.9 Apr 2016 50.8

Sep 2016 51.5 Mar 2016 51.8

Aug 2016 49.4 Feb 2016 49.5

Jul 2016 52.6 Jan 2016 48.2

Jun 2016 53.2 Dec 2015 48.0

Average for 12 months -- 51.0

High -- 53.2

Low -- 48.0

New Orders

ISM(R) 's New Orders Index registered 53 percent in November, which is an increase of 0.9 percentage point when compared to the 52.1 percent reported for October, indicating growth in new orders for the third consecutive month. A New Orders Index above 52.2 percent, over time, is generally consistent with anincrease in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

The nine industries reporting growth in new orders in November -- listed in order -- are: Petroleum & Coal Products; Miscellaneous Manufacturing; Textile Mills; Paper Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Machinery; and Primary Metals. The nine industries reporting a decrease in new orders during November -- listed in order -- are: Furniture & Related Products; Printing & Related Support Activities; Wood Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Fabricated Metal Products; Transportation Equipment; and Plastics & Rubber Products.

New Orders %Better %Same %Worse Net Index

Nov 2016 27 51 22 +5 53.0

Oct 2016 24 56 20 +4 52.1

Sep 2016 27 53 20 +7 55.1

Aug 2016 22 52 26 -4 49.1

Production

ISM(R) 's Production Index registered 56 percent in November, which is an increase of 1.4 percentage points when compared to the 54.6 percent reported for October, indicating growth in production for the third consecutive month. An index above 51.3 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.

The nine industries reporting growth in production during the month of November -- listed in order -- are: Miscellaneous Manufacturing; Petroleum & Coal Products; Paper Products; Textile Mills; Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Chemical Products; and Machinery. The six industries reporting a decrease in production during November -- listed in order -- are: Printing & Related Support Activities; Transportation Equipment; Nonmetallic Mineral Products;Primary Metals; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components.

Production %Better %Same %Worse Net Index

Nov 2016 26 57 17 +9 56.0

Oct 2016 25 56 19 +6 54.6

Sep 2016 24 56 20 +4 52.8

Aug 2016 19 59 22 -3 49.6

Employment

ISM(R) 's Employment Index registered 52.3 percent in November, a decrease of 0.6 percentage point when compared to the October reading of 52.9 percent, indicating growth in employment in November for the second consecutive month. An Employment Index above 50.6 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

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