Manufacturing: 'Staged For A Relatively Strong Comeback'

By John S. McClenahen The Institute for Supply Management's (ISM) Dec. 1 report that its manufacturing activity index advanced 5.8 percentage points to 62.8% in November "is very encouraging and adds to the evidence that manufacturing is finally staged for a relatively strong comeback from its three-year recession," states Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group. A number above 50% on the PMI, as ISM's manufacturing index is formally known, indicates the manufacturing sector of the U.S. economy generally is expanding; a figure below 50% signals contraction. November was the fifth consecutive month in which manufacturing grew, according to Tempe, Ariz.-based ISM. Indeed, "the manufacturing sector enjoyed its best month since December 1983," claims Norbert J. Ore, the chair of ISM's manufacturing business survey committee and group director for strategic sourcing and procurement at Georgia-Pacific Corp. "The big improvement is in employment as [that] index rose above 50%, indicating growth, following 37 consecutive months of decline." Looking ahead, Meckstroth notes that "orders for manufactured goods were very strong [in November] and that bodes well for expanding production this winter." What's more, he adds, "exports are growing again, aided by a declining [U.S.] dollar, and business equipment investment spending is rebounding."

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