ISM Report: Manufacturing’s streak rolls on at a slower pace

Sector still expanding, but rate drops off April’s high point


Institute of Supply Management logo. Courtesy: ISMManufacturing’s three-year growth streak continued in May, albeit at a slower pace than in April, according to the latest Institute for Supply Management manufacturing report.

The manufacturing sector expanded for the 34th straight month and the nation’s overall economy hit the three-year mark in growth, according to the report, issued by the ISM’s Manufacturing Business Survey Committee.

“The PMI registered 53.5% a modest decrease of 1.3 percentage points from April's reading of 54.8% indicating expansion in the manufacturing sector for the 34th consecutive month,”  said committee chair Bradley J. Holcomb, CPSM, CPSD. “The New Orders Index continued its growth trend for the 37th consecutive month, registering 60.1% in May. This represents an increase of 1.9 percentage points from April and also the highest level recorded by the index since April 2011.” A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.

“The Prices Index for raw materials fell to 47.5% in May, dropping 13.5 percentage points from April, indicating lower prices for the first time since December 2011,” Holcomb added. “Comments from the panel generally reflect stable-to-strong orders, with sales showing steady improvement over the first five months of 2012.”

Despite a slowing in jobs growth in May, comments from survey participants were generally bullish. “Business has been trending moderately higher since the beginning of the year,” said one chemical products manufacturer. “(We) anticipate 5% to 7% growth for the year.”

“Sales were stronger than expected; customers are waiting until the last minute to place orders,” added a machinery manufacturer.

“We are having the best year in sales volume and profit since mid-2008,” said a fabricated metal products manufacturer.

A PMI in excess of 42.6% over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 36th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 34th consecutive month. “The past relationship between the PMI and the overall economy indicates that the average PMI for January through May (53.6%) corresponds to a 3.7% increase in real gross domestic product,” said Holcomb. “In addition, if the PMI for May (53.5%) is annualized, it also corresponds to a 3.7% increase in real GDP annually.” 

Last 12 months











May 2012






Nov 2011




Apr 2012






Oct 2011




Mar 2012






Sep 2011




Feb 2012






Aug 2011




Jan 2012






Jul 2011




Dec 2011






Jun 2011




Average for 12 months – 53.1
High – 55.8
Low – 51.4


No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Choosing controllers: PLCs, PACs, IPCs, DCS? What's best for your application?; Wireless trends; Design, integration; Manufacturing Day; Product Exclusive
Variable speed drives: Smooth, efficient, electrically quite motion control; Process control upgrades; Mobile intelligence; Product finalists: Vote now; Product Exclusives
Machine design tips: Pneumatic or electric; Software upgrades; Ethernet advantages; Additive manufacturing; Engineering Leaders; Product exclusives: PLC, HMI, IO
This article collection contains the 5 most referenced articles on improving the use of PID.
Learn how Industry 4.0 adds supply chain efficiency, optimizes pricing, improves quality, and more.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security