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Sep 2014  
 
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January PMI drops sharply

Economic activity in the manufacturing sector expanded in January for the eighth consecutive month, and the overall economy grew for the 56th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The January PMI registered 51.3 percent, a decrease of 5.2 percentage points from December's seasonally adjusted reading of 56.5 percent,"  said Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management, Tempe, Ariz. "The New Orders Index registered 51.2 percent, a significant decrease of 13.2 percentage points from December's seasonally adjusted reading of 64.4 percent. The Production Index registered 54.8 percent, a decrease of 6.9 percentage points compared to December's seasonally adjusted reading of 61.7 percent. Inventories of raw materials decreased by 3 percentage points to 44 percent, its lowest reading since December 2012 when the Inventories Index registered 43 percent. A number of comments from the panel cite adverse weather conditions as a factor negatively impacting their businesses in January, while others reflect optimism and increasing volumes in the early stages of 2014."

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

WHAT RESPONDENTS ARE SAYING …

  • "We are seeing slight improvements, year-over-year, month-to-month, across most regions and business segments." (Apparel, Leather & Allied Products)
  • "Poor weather impacted outbound and inbound shipments." (Fabricated Metal Products)
  • "Good finish to 2013, but slow start to 2014, mostly attributed to weather." (Petroleum & Coal Products)
  • "U.S. government aerospace business is very brisk." (Transportation Equipment)
  • "Slight improvements in defense business. But still lagging from previous years." (Computer & Electronic Products)
  • "Cautiously optimistic about increasing volumes but still challenging, and margins remain low." (Chemical Products)
  • "We have experienced many late deliveries during the past week due to the weather shutting down truck lines." (Plastics & Rubber Products)
  • "We continue to be busy, working six days, 24 hours a day." (Primary Metals)
  • "Restricted optimism heading into Q1." (Machinery)
  • "Delays in government product certification due to the partial government shutdown last year are still negatively impacting delivery and inventory levels." (Miscellaneous Manufacturing)

 

MANUFACTURING AT A GLANCE

JANUARY 2014

 

Index

Series Index

Jan

Series Index

Dec

Percentage

Point

Change

Direction

Rate of Change

Trend* (Months)

             

PMI®

51.3

56.5

-5.2

Growing

Slower

8

New Orders

51.2

64.4

-13.2

Growing

Slower

8

Production

54.8

61.7

-6.9

Growing

Slower

17

Employment

52.3

55.8

-3.5

Growing

Slower

7

Supplier Deliveries

54.3

53.7

+0.6

Slowing

Faster

8

Inventories

44.0

47.0

-3.0

Contracting

Faster

2

Customers' Inventories

44.0

47.5

-3.5

Too Low

Faster

26

Prices

60.5

53.5

+7.0

Increasing

Faster

6

Backlog of Orders

48.0

51.5

-3.5

Contracting

From Growing

1

Exports

54.5

55.0

-0.5

Growing

Slower

14

Imports

53.5

55.0

-1.5

Growing

Slower

12

             

OVERALL ECONOMY

 

Manufacturing Sector

Growing

Slower

56

Growing

Slower

8

       

Manufacturing ISM Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.
*Number of months moving in current direction
Indexes reflect newly released seasonal adjustment factors.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price
Copper; Electrical Components; Natural Gas; Plastic Resins (2); Polypropylene Resins; Stainless Steel (2); Steel (2); Steel — Hot Rolled (3); and Wood (3).

Commodities Down in Price
Caustic Soda is the only commodity reported in short supply.

Commodities in Short Supply
No commodities are reported in short supply.

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


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