November 1, 2004
Economic activity in the manufacturing sector grew in October for the 17th consecutive month, while the overall economy grew for the 36th consecutive month, said the nation's supply executives in the latest Manufacturing ISM Report On Business®. However, primary metals and fabricated metals were not among the 15 industries reporting growth.
The report was issued Nov. 1 by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee and group director, strategic sourcing and procurement, Georgia-Pacific Corporation. "Strong growth continues in the sector, but at a slower rate than in September. New orders and production remain strong, and employment continues to expand. However, energy prices and commodity price inflation are major concerns for manufacturing buyers," said Ore. Aluminum, steel, stainless steel, and products made from these materials are among the commodities reported up in price. Stainless steel, steel, and steel products also are among the commodities listed in short supply.
The ISM Prices Index still indicates that there is significant upward pressure on prices. ISM's Customers' Inventories Index indicates that customer inventories are too low at this time. The Backlog of Orders Index indicates that order backlogs decreased in October. The New Export Orders and Imports Indexes continued to grow in October.
ISM's PMI registered 56.8 percent in October, a decrease of 1.7 percentage points when compared to 58.5 percent in September. ISM's New Orders Index rose 0.2 percentage point from 58.1 percent in September to 58.3 percent in October. ISM's Production Index decreased 2.7 percentage points from 61.6 percent in September to 58.9 percent in October.
The ISM Employment Index is at 54.8 percent for October, a decrease of 3.3 percentage points when compared to the 58.1 percent reported in September.
ISM's Supplier Deliveries Index registered 58.6 percent, 1 percentage point lower than September's 59.6 percent. ISM's Inventories Index registered 48.2 percent in October, down from the 51 percent reported in September. ISM's Customers' Inventories Index for October is at 43.5 percent, an increase of 2 percentage points compared to the September reading of 41.5 percent. ISM's Prices Index in October is 78.5 percent, 2.5 percentage points higher than the 76 percent reported in September.
ISM's Backlog of Orders Index for October declined 6 percentage points to 49 percent from 55 percent registered in September. ISM's New Export Orders Index registered 56.6 percent, a decrease of 4.8 percentage points from September's 51.8 percent. ISM's Imports Index increased 2.7 percentage points to 58.5 percent in October, up from 55.8 percent in September.