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According to the latest ISM report for May 2013, manufacturing is contracting. The ISM index has fallen to its lowest level since June 2009. According to Dr. Ken Mayland, the decline of the PMI below 50 is a surprise to almost everyone.

But it is a continuation of a trend- this is the third consecutive month of decrease.
But it is a continuation of a trend- this is the third consecutive month of decrease.

“Economic activity in the manufacturing sector contracted in May for the first time since November 2012, and the overall economy grew for the 48th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business,® according to Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee.”

Here are the bullet points:

  • ISM PMI fell 1.7 points to 49- contraction!
  • PMI at lowest level since June 2009 when it was 45.8%- Let’s hope we don’t go there!
  • New Orders index declined by 3.5% to 48.8%
  • Production Index declined by 4.9% to 48.6%

10 of the 18 manufacturing industries reported growth in May in the following order: Printing & Related Support Activities; Nonmetallic Mineral Products; Fabricated Metal Products; Wood Products; Furniture & Related Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Machinery; and Paper Products.

Precision Machining is a subset of Fabricated Metals, which was ranked number three on this list.

Silver Lining Department

“ISM’s Employment Index registered 50.1 percent in May, which is 0.1 percentage point lower than the 50.2 percent reported in April. This month’s Employment index indicates growth in employment for the 44th consecutive month, but at a slightly slower rate. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.”

Manufacturers are still looking for to pick up people with skills who can add value.
Graph Courtesy Calculated Risk Blog

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