May 2015 Manufacturing ISM® Report On Business®

New Orders, Production, Employment and Inventories Growing
Supplier Deliveries Slowing

Economic activity in the manufacturing sector expanded in May for the 29th consecutive month, and the overall economy grew for the 72nd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.  The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

Said Holcomb, "The May PMI® registered 52.8 percent, an increase of 1.3 percentage points over the April reading of 51.5 percent. The New Orders Index registered 55.8 percent, an increase of 2.3 percentage points from the reading of 53.5 percent in April. The Production Index registered 54.5 percent, 1.5 percentage points below the April reading of 56 percent. The Employment Index registered 51.7 percent, 3.4 percentage points above the April reading of 48.3 percent, reflecting growing employment levels from April. Inventories of raw materials registered 51.5 percent, an increase of 2 percentage points from the April reading of 49.5 percent. The Prices Index registered 49.5 percent, 9 percentage points above the April reading of 40.5 percent, indicating lower raw materials prices for the seventh consecutive month. Comments from the panel carry a positive tone in terms of an improving economy, increasing demand, and improving flow of goods through the West Coast ports. Also noted; however, are continuing concerns over the price of the US dollar and challenges affecting markets related to oil and gas industries."

Of the 18 manufacturing industries, 14 are reporting growth in May in the following order: Apparel, Leather & Allied Products; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Primary Metals; Transportation Equipment; Printing & Related Support Activities; Fabricated Metal Products; Machinery; Miscellaneous Manufacturing; and Chemical Products. The two industries reporting contraction in May are: Textile Mills; and Computer & Electronic Products.

What respondents are saying...

    "Economy is showing signs of improvement." (Food, Beverage & Tobacco Products)
    "Automotive is still strong. However, steel prices have dropped due to overcapacity and the strong US dollar." (Fabricated Metal Products)
    "Overall business is steady. Employment in this area is up, a good sign." (Transportation Equipment)
    "Strong spring demand in agriculture." (Chemical Products)
    "The exchange rate on the dollar is hurting our sales in Asia. The conversion rate is lowering our profit in Europe where we sell in Euros." (Computer & Electronic Products)
    "Sales are starting to stabilize and show improvement from prior months, Year to Date (YTD). Concerns still exist with the overall economy." (Apparel, Leather & Allied Products)
    "Continued challenges in markets related to oil and gas industries." (Miscellaneous Manufacturing)
    "Oversupply is continuing to tighten profit margins." (Wood Products)
    "West Coast port issues have eased up and our incoming imports are flowing again." (Machinery)
    "Chemicals pricing seems to have bottomed and is slowly rising again." (Plastics & Rubber Products)

To read the full report, go to https://www.instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?navItemNumber=29347