Sept. 4, 2013
PMI Hits New 2013 High at 55.7 Percent
Economic activity in the manufacturing sector expanded in August for the third straight month, continuing its summer run of strength, according to the Tempe, Ariz.-based Institute for Supply Management’s latest Manufacturing Report on Business. ISM's PMI registered 55.7 percent, an increase of 0.3 percentage points from July and the highest reading of the year. A reading above 50 indicates growth. Overall, the economy grew for the 51st consecutive month.
Of the 18 manufacturing industries surveyed, purchasing managers in 15 reported growth in August. Those seeing growth included primary metals, fabricated metal products and machinery. Miscellaneous manufacturing was the only industry to report contraction in August.
The PMI of 52.5 percent for the first seven months would correspond to a 3.2 percent increase in real gross domestic product, says Bradley J. Holcomb, chairman of ISM”s Manufacturing Business Survey Committee. Moreover, if the PMI for August is annualized, it corresponds to a robust 4.2 percent increase in real GDP.
ISM’s New Orders Index increased in August by 4.9 percentage points to 63.2 percent, while the Production Index decreased by 2.6 percentage points to 62.4 percent. The Employment Index registered 53.3 percent, a decrease of 1.1 percentage points compared to July's reading. The Prices Index registered 54 percent, increasing 5 percentage points from July, indicating that overall raw materials prices increased when compared to the previous month.