We remain optimistic for the outlook for manufacturing for the next three months based on the latest  ISM PMI and PMPA Business Trends Indicators.
The latest Institute for Supply Management PMI (Purchasing Managers Index) increased 1.8 points to 57.1 for July. The July value was the 14th consecutive month of manufacturing expansion; the 62nd consecutive month of expansion in the broad economy, and the highest value since April 2011.
Using the July reading, this value indicates an expansion in manufacturing, but if annualized, is also consistent with a 4.6% rate of increase of real GDP according to ISM.
July 14 ISM pmi
If the January through July data is annualized, the  corresponding GDP growth would be about 3.7%.
PMPA’s June 2014 Business Trends Report showed a seasonal decline  in shipments for the month of June, but the average for the year to date is 123, up 6 points (~5.1%)  from last year’s 117 year end average.
PMPA’s Business Trends Indicator for Sales/ Shipments sentiment was strongly positive in June, with ~88% of respondents expecting sales to remain the same or increase over the next three months. and 89% of respondents expecting lead times to increase or remain the same for the next three months.
July ISM PMI GRAPH  courtesy St Louis Fed
July 2014 ISM PMI Report for Manufacturing

The ISM PMI  report issued today  is the highest reading for the year to date. 

Highest value of the year.
Highest value of the year.

PMPA’s Business Trends Index for August was up substantially (6.7%),  and we believe that the PMPA index is a leading indicator for industrial activity. ( You can’t ship your manufactured goods if our precision machined components aren’t in them.)
Leading indicator?
Leading indicator?

The September ISM PMI reaching its high for the year validates our belief in the Business Trends as a leading indicator.
The PMI™ registered 56.2 percent, an increase of 0.5 percentage point from August’s reading of 55.7 percent. September’s PMI™ reading is the highest of the year, leading to an average PMI™ reading of 55.8 percent for the third quarter. The New Orders Index decreased in September by 2.7 percentage points to 60.5 percent, and the Production Index increased by 0.2 percentage point to 62.6 percent. The Employment Index registered 55.4 percent, an increase of 2.1 percentage points compared to August’s reading of 53.3 percent, which is the highest reading for the year.“- Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee.
As businessmen and women, we’re obviously pleased with the Increase in the PMI.
However, The employment index also reached its highest point for the year to 55.4, up 2.1 %.
We continue to be optimistic about employment opportunities in advanced manufacturing, and ISM report supports our claim for this too.
ISM PMI Sept 2013

Forbes Blog nails this one folks!

No questions from me.

According to John Bruner:” In 2010, American manufacturers added value of $1.7 trillion to the U.S. economy, up 6.6% over the previous year after accounting for inflation. By the same measure, the rest of the economy grew by 2.2%.

You might not know it from public commentary, but the United States manufactures more than any other country (including China), and U.S. factories are within reach of their all-time greatest output.”

In 2007, the last year for which we were able to find Census Data, 3,296 companies in NAICS 332721, Precision Machining, produced over $15,054,173,000 in shipments.

PMPA’s Business Trends Index for July (historically a seasonally slow month) is 111, justone point off from the average for 2007 our peak year before the recession.

So when you hear all that steamy doom and gloom on those TV shows, well

Instead of listening to the guy behind all that steam and smoke

Just take a look at the data!

 For the full Forbes Blog click here


OZ picture