With 85 companies responding, the PMPA Business Trends Index in September 2016 remained even with August at 118, up ten points from the year’s low in July and up 4 points from the average for September for the past four years which was 114. Last year’s September Sales index was 119, so we are down just one point from last year for September, and down just two points from the 2015 calendar year average of 121.
Opinions for the next three months compared to today:
Net Sales:The Sales Outlook remains level despite our approach into the usually lower sales months of the fourth quarter.
Lead Times: Overall outlook for Lead Times dropped considerably in this report, signaling open capacity foreseen in the next three months.
Employment: Prospects for employment are positive with NINETY-SIX PERCENT (96%) expecting level or increased opportunities for employment.
Profitability:Overall sentiment for profitability has remained level since May.
“Economic activity in the manufacturing sector expanded in September following one month of contraction in August, and the overall economy grew for the 88th consecutive month” according to the latest Institute for Supply Management Purchasing Manager’s Index Report. September ISM PMI
Our look this month at the ISM PMI release for September is positive for our precision machining shops, for manufacturing, and for the broader US Economy.
The ISM’s New Order Index increase of 6 percentage points bodes well for our shops going forward.
The increase in the PMI back to expansion for manufacturing is a positive,
This is the 88th consecutive month of expansion in the broader economy according to this report.
According to Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: “The September PMI® registered 51.5 percent, an increase of 2.1 percentage points from the August reading of 49.4 percent. The New Orders Index registered 55.1 percent, an increase of 6 percentage points from the August reading of 49.1 percent. The Production Index registered 52.8 percent, 3.2 percentage points higher than the August reading of 49.6 percent. The Employment Index registered 49.7 percent, an increase of 1.4 percentage points from the August reading of 48.3 percent. “
The increase of 2.1 percentage points in the ISM PMI over August beat analyst’s expectations of 50.3 and shows manufacturing back in expansion mode. In a Wall Street Journal poll, published prior to the ISM release, economists estimated that the ISM reading would increase to 49.7 from 49.4 the month before- showing manufacturing still in contraction mode. We’re glad the data beat the estimates!
Our shops have been seeing extreme volatility in sales as reported in our PMPA Business Trends Report for August. this September report is positive for precision machining.