Dec. 10, 2014
PMI Shows Manufacturing Still Expanding
Economic activity in the manufacturing sector expanded in November for the 18th consecutive month as the PMI registered 58.7 percent, reports the Institute for Supply Management, Tempe, Ariz. The reading was a decrease of 0.3 percentage points from October, but still well above the 50 percent mark indicating growth.
Of the 18 manufacturing industries polled, 14 reported growth in November, including fabricated metal products, machinery, miscellaneous manufacturing, and appliances and components. Only one industry, apparel, reported contraction during the month.
The average PMI figure from January through November of 55.8 percent corresponds to a 4.2 percent increase in real gross domestic product, says Bradley J. Holcomb, chairman of ISM's Manufacturing Business Survey Committee. "In addition, if the PMI for November is annualized, it corresponds to a 5.1 percent increase in real GDP annually," says Holcomb.
Other indices also had strong showings in November, with the New Orders Index up 0.2 percentage points to a 66 percent and the Production Index at 64.4 percent, down 0.4 percentage points from the previous month. The Employment Index grew for the 17th consecutive month, registering 54.9 percent, down 0.6 percent from October.
The Inventories Index registered 51.5 percent in November, which is 1 percentage point lower than in October, indicating raw materials inventories grew for the fourth consecutive month. The eight industries reporting higher inventories in November included primary metals, miscellaneous manufacturing and appliances, while fabricated metals reported no change in inventory levels.