The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “January marked 12 months of contraction in the manufacturing sector. However, the rate of decline as measured by the PMI was slower than experienced in December. The January New Orders Index is at 33.2 percent, up from the seasonally adjusted 23.1 percent recorded in December. While this is a significant month-over-month improvement, it is still a sign of continuing weakness in the sector. Comments from our respondents indicate that it will take a recovery in automobiles and housing for the manufacturing sector to once again prosper. On a positive note, the Prices Index continues to indicate significant deflation in the prices that manufacturers have to pay for their inputs, and this should ultimately be good for the consumer.”
PERFORMANCE BY INDUSTRY
The industries reporting growth in January — listed in order — are: Textile Mills; and Petroleum & Coal Products. The industries reporting contraction in January — listed in order — are: Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Paper Products; Plastics & Rubber Products; Transportation Equipment; Printing & Related Support Activities; Fabricated Metal Products; Computer & Electronic Products; Primary Metals; Chemical Products; Wood Products; Machinery; Miscellaneous Manufacturing; Furniture & Related Products; and Food, Beverage & Tobacco Products.
WHAT RESPONDENTS ARE SAYING …
- “The slowdown in the automobile industry is forcing their suppliers to reduce production and employment.” (Apparel, Leather & Allied Products)
- “Our manufacturing is tied to the automobile industry, and we are seeing the ‘trickle down’ effect.” (Chemical Products)
- “High inventory at customers is slowing production orders.” (Electrical Equipment, Appliances & Components)
- “Sales are settling in; Q4 was better than expected.” (Machinery)
- “Consumer confidence is low. Could see the entire year being down 20 percent to 30 percent.” (Fabricated Metals)
|
MANUFACTURING AT A GLANCE JANUARY 2009 |
||||||||||||
| Index |
Series
|
Series
|
Percentage
|
Direction |
Rate of
|
Trend(a)
|
||||||
| PMI | 35.6 | 32.9 | +2.7 | Contracting | Slower | 12 | ||||||
| New Orders | 33.2 | 23.1 | +10.1 | Contracting | Slower | 14 | ||||||
| Production | 32.1 | 26.3 | +5.8 | Contracting | Slower | 5 | ||||||
| Employment | 29.9 | 29.9 | 0 | Contracting | Same | 6 | ||||||
| Supplier Deliveries | 45.3 | 45.7 | -0.4 | Faster | Faster | 4 | ||||||
| Inventories | 37.5 | 39.6 | -2.1 | Contracting | Faster | 33 | ||||||
| Customers’ Inventories | 55.5 | 57.0 | -1.5 | Too High | Slower | 6 | ||||||
| Prices | 29.0 | 18.0 | +11.0 | Decreasing | Slower | 4 | ||||||
| Backlog of Orders | 29.5 | 23.0 | +6.5 | Contracting | Slower | 9 | ||||||
| Exports | 37.5 | 35.5 | +2.0 | Contracting | Slower | 4 | ||||||
| Imports | 36.5 | 39.0 | -2.5 | Contracting | Slower | 12 | ||||||
|
OVERALL ECONOMY
Manufacturing Sector |
Contracting | Slower | 4 | |||||||||
| Contracting | Slower | 12 | ||||||||||
