By Bruce Erickson
November 17, 2009
In October, the PMI or Purchasing Managers Index reported significant gains for the tenth straight month and for the third month over the 50% mark. A PMI over 50 indicated the economy is expanding while anything below the 50% mark indicates the economy is contracting. Since July, rates of growth in manufacturing have outpaced even the dramatic increases of the equity markets.
As indicated by the information below compliments of the Institute for Supply Management, although new orders have slowed since September, they are still growing. The only declines are inventories as wholesalers and retailers are still skittish about overstocking. Perhaps the most inspiring data point is employment which has transitioned form contracting to growing. Most of this is in temporary labor and contract labor at this point. But it is evident that as production grows, previous staffing models are going to be spread to thin resulting in new hires going into the new year.
MANUFACTURING AT A GLANCE | ||||||
| Series | Series | Percentage |
| Rate |
|
PMI | 55.7 | 52.6 | +3.1 | Growing | Faster | 3 |
New Orders | 58.5 | 60.8 | -2.3 | Growing | Slower | 4 |
Production | 63.3 | 55.7 | +7.6 | Growing | Faster | 5 |
Employment | 53.1 | 46.2 | +6.9 | Growing | From Contracting | 1 |
Supplier Deliveries | 56.9 | 58.0 | -1.1 | Slowing | Slower | 5 |
Inventories | 46.9 | 42.5 | +4.4 | Contracting | Slower | 42 |
Customers' Inventories | 38.5 | 39.0 | -0.5 | Too Low | Faster | 7 |
Prices | 65.0 | 63.5 | +1.5 | Increasing | Faster | 4 |
Backlog of Orders | 53.5 | 53.5 | 0.0 | Growing | Same | 3 |
Exports | 55.5 | 55.0 | +0.5 | Growing | Faster | 4 |
Imports | 51.0 | 52.0 | -1.0 | Growing | Slower | 2 |
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OVERALL ECONOMY | Growing | Faster | 6 | |||
Manufacturing Sector | Growing | Faster | 3 |