ISM Manufacturing continues to show healthy expansion, although down a bit from previous months. (Any reading over 50 is expansionary) Some of that slowdown might be blamed on the situation in Japan. Consensus for this month was a slowdown to 59.5, so the 60.4 was better than expected. Pricing pressure continues in the supply chain. While manufacturing is only about 11% of U.S. output, and 9% of employment, this has been an area of strength during the past few years.
WHAT RESPONDENTS ARE SAYING ...
- Rapidly rising raw material costs putting extreme pressure on profits. (Food, Beverage & Tobacco Products)
- Plastic resin product prices are climbing so fast that [suppliers] are attempting to increase prices on orders already accepted but not [yet] delivered. (Chemical Products)
- Customers are rebuilding safety stock levels of inventory, and also trying to buy ahead of material price increases. (Plastics & Rubber Products)
- Market continues to get stronger month over month. Recovery is faster than anticipated. (Transportation Equipment)
- Pressure from offshore suppliers continues to mount with exchange rate increases and seasonal demand for capacity. (Miscellaneous Manufacturing)
|MANUFACTURING AT A GLANCE|
|Customers' Inventories||40.5||39.5||+1.0||Too Low||Slower||25|
|Backlog of Orders||61.0||52.5||+8.5||Growing||Faster||4|
*Number of months moving in current direction.