While the ISM Non Manufacturing report to be released later this week represents far more of he economy, the ISM Manufacturing seems to get the lion's share of the attention. We are still over 50 on this one, but not by much - so it's slightly expansionary, but below expectations. Not sure if it will mean much on a day like today when Europe is dominating the news. Full report here.
New orders improved which is a welcome change from the past few months. Employment was essentially flat but the big news was the huge drop in prices. This is the first reading below 50 on prices since May 2009.
PERFORMANCE BY INDUSTRY
WHAT RESPONDENTS ARE SAYING ...
- Starting to see some deflation on raw materials. (Chemical Products)
- Overall industry volumes remain flat vs. previous month. Uncertainty in supply chain is increasing due to lower volumes vs. historical. (Electrical Equipment, Appliances & Components)
- International: contraction in demand for our products is driving mitigation of excess material on order. Contract manufacturers are adjusting their resources accordingly. (Machinery)
- Business is very strong, both domestically and internationally. (Fabricated Metal Products)
- With metal prices declining, we are seeing some short-term forecast strength. If metal pricing increases again, this strength is expected to disappear again. (Primary Metals)
- Auto industry still strong. (Transportation Equipment)
- Business is slowing — not crashing — but uncertainty and caution is the order of the day. (Plastics & Rubber Products)
- Retail branded business is slower than expected due to consumers continuing to move to private label- and store-brand products for price advantage. Raw material supplies are in good shape, but prices are staying stubbornly higher than expected. (Food, Beverage & Tobacco Products)
|MANUFACTURING AT A GLANCE|
|New Orders||52.4||49.6||+2.8||Growing||From Contacting||1|
|Customers' Inventories||43.5||49.0||-5.5||Too Low||Faster||31|
|Backlog of Orders||47.5||41.5||+6.0||Contracting||Slower||5|