New orders, production expanding with growing employment and slowing deliveries increasing prices

02/06/2006


Tempe, AZ —Economic activity in manufacturing grew in January for the 32nd consecutive month, while the overall economy grew for the 51st consecutive month, say the nation’s supply executives in the latest ISM Report On Business. Both new orders and production remain relatively strong, and the panel of respondents is generally upbeat about their business. It appears that the sector has recovered from the disruptions and dislocations caused by the Gulf Coast hurricanes. The Prices Index rose slightly during the month; however, the list of commodities reported‘up in price’ is significantly reduced from December.


The 13 industries reporting January growth—in order—are: apparel; primary metals; miscellaneous; textiles; food; transportation and equipment; fabricated metals; electronic components and equipment; industrial and commercial equipment and computers; furniture; instruments and photographic equipment; rubber and plastic products; and chemicals.

Representative comments from respondents are:

  • Sales are still strong (chemicals);

  • Business was very steady last quarter of 2005, and first quarter of 2006 is also strong (electronic components and equipment);

  • 'November and December sales were robust, which helped in reducing inventory for the year end (fabricated metals);

  • We experienced some softness in December sales. Reason unknown at this time (food); and

  • The machine tool industry as a whole remains sluggish although there is more quoting activity and there are a few bright spots on the horizon. (industrial and commercial equipment and computers).

Manufacturing at a glance January 2006
Series index Series index Percentage point Rate of Trend*
IndexJanuaryDecemberchangeDirectionchange(months
PMI54.855.6-0.8GrowingSlower32
New Orders58.059.1-1.1GrowingSlower33
Production56.657.8-1.2GrowingSlower33
Employment51.353.6-2.3GrowingSlower8
Supplier deliveries55.352.9+2.4SlowingFaster31
Inventories46.547.3-0.8ContractingFaster10
Customers’ inventories46.048.0-2.0Too LowFaster56
Prices65.063.0+2.0IncreasingFaster6
Backlog of orders53.549.5+4.0GrowingFrom Contracting1
Exports58.554.3+4.0GrowingFaster39
Imports57.052.8+4.2GrowingFaster49
Overall economyGrowingSlower51
Manufacturing sectorGrowingSlower32
*Number of months moving in current direction
Indexes reflect newly released seasonal adjustment factors.

For more information visit: www.napm.org

Richard Phelps , senior editor, Control Engineering





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