Manufacturing Grows at Slower Pace

The nation's manufacturing sector exhibited continued growth in September, but at a rate off the pace achieved in August, according to the NAPM Business Report. The report, published by the National Assn. of Purchasing Management, said the overall economy grew for the 77th consecutive month. "The manufacturing sector grew at a slower pace in September than in August with production and new orders continuing to grow but at slower rates," says Norbert J. Ore, chair of NAPM's Business Survey Committee and director of purchasing, ipd/paper, Sonoco Products Co. "Supplier deliveries continued to indicate slow delivery performance. NAPM's price index indicated increases in prices paid when compared to the previous month. Use of imports and new export orders increased, but at slower rates. Purchasing executives' comments on business conditions indicated few problems in their supply chain. Major concerns expressed were seasonal ups and downs and labor availability, primarily in the Midwest." Month-to-month comparison of NAPM indexes is as follows:

  • Purchasing Manager's Index (PMI): slower growth to 54.2% in September vs. August. The PMI is a composite of five indexes--new orders, production, supplier deliveries, inventories, and employment--and a reading over 50% indicates manufacturing sector growth; a PMI over 43.9%, over a period of time, indicates overall economy growth.
  • Production: slower growth, 57.4%.
  • New orders: slower growth, 55.8%.
  • Backlog of orders: unchanged, 50.0%.
  • Supplier deliveries: slower rate of reduction, 55.2%.
  • Inventories: slower rate of reduction, 46.9%.
  • Employment: slower growth, 50.7%.
  • Prices: faster growth, 54.7%.
  • New export orders: slower growth, 50.8%.
  • Imports: slower growth, 53.1%. NAPM also reports that average leadtime for production materials decreased to 48 days in September from 50 days in August; leadtime for MRO supplies rose to 27 days from 25 days; and leadtime for capital expenditures fell from 124 days to 122 days.
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