A Rosy Picture for Near-Term Manufacturing

Dec. 1, 2011
ISM reports 52.7% increase in Purchasing Managers' Index

Manufacturing continued its growth in November as the PMI registered 52.7%, an increase of 1.9 percentage points when compared to October's reading of 50.8%, the Institute for Supply Management reported on Dec. 1.

"The aggressive gain in November activity returns the index to a normal position that is slightly above its 20-year average, " said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation (MAPI). "A very strong improvement in new orders and production paints a rosy picture for near-term manufacturing activity. In addition, strong gains in motor vehicle production, capital equipment production, and oil field goods continue to drive moderate industrial growth.

"The fact that manufacturing is growing faster than the general economy, though, is unsurprising since the industrial sector is still catching up," he added. "Manufacturing production has recovered only a bit over one-half of its loss from the 2008-2009 recession, in contrast to full recovery in GDP for the economy at large in the third quarter of 2011."

ISM explained that a PMI in excess of 42.5%, over a period of time, "generally indicates an expansion of the overall economy." Therefore, the PMI indicates growth for the 30th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 28th consecutive month.

"The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (55.4%) corresponds to a 4.5% increase in real gross domestic product (GDP)," said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee. "In addition, if the PMI for November (52.7%) is annualized, it corresponds to a 3.6% increase in real GDP annually."

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!