Economy

ISM PMI Grows Slightly to 54.9

June 1, 2017

Manufacturing activity expanded in May according to the Manufacturing ISM Report on Business. The PMI rose 0.1 percent from April to a reading of 54.9 percent. The new orders index rose 2 points to 59.5 percent while the production index declined 1.5 points to 57.1.

Inventories were relatively stable in May. The inventory index rose 0.5 percent to 51.5. The prices index decreased 8 points to 60.5 percent. The decrease indicated a fifteenth month of higher raw material prices but May’s increase was at a slower rate compared to April.

Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee, wrote:

“Comments from the panel generally reflect stable to growing business conditions, with new orders, employment and inventories of raw materials all growing in May compared to April. The slowing of pricing pressure, especially in basic commodities, should have a positive impact on margins and buying policies as this moderation moves up the value chain.”

Fifteen of the 18 manufacturing industries tracked by ISM reported growth in May.

Some of the comments by survey respondents were:

“Business conditions are steady, and with competition increasing, it’s making negotiations even more intense to reduce costs.” (Machinery)
“Business is booming, and getting direct employees is increasingly difficult.” (Fabricated Metal Products)
“Economy is still strong, but [the] political climate can change things very quickly.” (Transportation Equipment)
“Global price increases for commodities.” (Electrical Equipment, Appliances & Components)
“Business (sales/production) is steady. Pricing pressures on raw materials. Skilled labor in short supply.” (Furniture & Related Products)
“Agricultural demand very strong.” (Chemical Products)
“Our business is definitely paying attention to developments with the Canadian lumber tariff announcement. The final outcome could change our fiber pricing.” (Paper Products)
“OEM longer lead parts possibly longer lead time due to more orders.” (Nonmetallic Mineral Products)

Below is a graph showing the history of the ISM Manufacturing Index. You will need to view the graph on our website to use its interactive features, you can do so by clicking here. If you need assistance logging into or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.