The Industrial Supply Management report is out and it's pretty good news! Manufacturing is finally expanding. Any reading above 50 indicates growth. The bad news is they are still laying people off, employment is still contracting. New Orders are way up, to 64.9 from 55.3 last month.
Economic activity in the manufacturing sector expanded in August, following 18 consecutive months of contraction, and the overall economy grew for the fourth consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®. The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The year-and-a-half decline in manufacturing output has come to an end, as 11 of 18 manufacturing industries are reporting growth when comparing August to July. While this is certainly a positive occurrence, we have to keep in mind that it is the beginning of a new cycle and that all industries are not yet participating in the growth. The August index of 52.9 percent is the highest since June 2007. The 4 percentage point increase was driven by significant strength in the New Orders Index, which is up 9.6 points to 64.9 percent, the highest since December 2004. The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand."
|MANUFACTURING AT A GLANCE AUGUST 2009|
|Customers' Inventories||39.0||42.5||-3.5||Too Low||Faster||5|
|Backlog of Orders||52.5||50.0||+2.5||Growing||From Unchanged||1|
|Manufacturing Sector||Growing||From Contracting||1|
*Number of months moving in current direction