PMI index dips in March, but stays on growth path

Unexpected drop to 51.3% disappoints analysts, stock market

04/02/2013


Institute of Supply Management logo. Courtesy: ISMThe Institute for Supply Management’s monthly PMI report was a mixed bag for March. While manufacturing activity grew for the fourth straight month and the overall economy approached four years of sustained growth, the PMI Index for March was sharply lower.

The March PMI was 51.3%, 2.9 percentage points down from the February level of 54.2% and lower than industry analysts expected. The lower reading was reportedly one reason stocks slumped on April 1. The downturn was the first since October 2012, though the reading still points to growth in the manufacturing sector.

Bradley J. Holcomb, chairman of the Institute for Supply Management Manufacturing Business Survey Committee said the latest number is “indicating expansion in manufacturing for the fourth consecutive month, but at a slower rate. Both the New Orders and Production Indexes reflected growth in March compared to February, albeit at slower rates.”

The report quoted survey respondents as indicating growth and optimism, but with some tempering. Among the comments included with the PMI report:

  • “Beginning to feel the seasonal upswing in business. Energy and resin remain a concern.” (Food, Beverage & Tobacco Products)
  • “While the second half of 2013 looks promising, the first half is a mixed bag.” (Computer & Electronic Products)
  • “Things seem slightly better than last year, but still not great.” (Printing & Related Support Activities)
  • “Automotive is still very strong.” (Fabricated Metal Products)
  • “Post-election in the U.S., companies within the oil and gas sector are still waiting for signs of some regulatory certainty or stability.” (Petroleum & Coal Products)

A PMI above 42.2% indicates general growth in the overall economy, which meant March’s number were the 46th straight month of overall economic growth. “The past relationship between the PMI and the overall economy indicates that the average PMI for January through March (52.9%) corresponds to a 3.3% increase in real gross domestic product on an annualized basis,” Holcomb said. “In addition, if the PMI for March (51.3%) is annualized, it corresponds to a 2.8% increase in real GDP annually.”

THE LAST 12 MONTHS



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.
Salary and career survey: Benchmarks and advice; Designing controls; Remote data collection, historians; Control valve advances; Hannover Messe; Control Engineering International
System integration: Best practices and technologies to help; Virtualization virtues; Cyber security advice; Motor system efficiency, savings; Product exclusives; Road to Hannover
Collaborative robotics: How to improve safety, return on investment; Industrial Internet of Things, Industrie 4.0: World views; High-performance HMI, Information Integration: OPC and OMG
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
PLCs, robots, and the quest for a single controller; how OEE is key to automation solutions.

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

Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
click me