Manufacturing saw strengths, weaknesses in 2012; 2013 off to a good start
Published: February 22nd, 2013
Manufacturing in 2012 was sort of like the opening sentence of Charles Dickens’ A Tale of Two Cities: “It was the best of times, it was the worst of times . . .” It was tough to figure out just what was happening and where manufacturing was headed.
The automotive industry was a major bright spot in 2012, and of course medical (in spite of the device tax in the ACA) and packaging (food, beverage, consumer goods, and just about anything else that goes in a package) remained strong.
The Institute for Supply Management (ISM) reported that the manufacturing sector expanded in January for the second consecutive month, with the Purchasing Managers Index (PMI)registering 53.1%, an increase of 2.9% from December’s seasonally adjusted reading of 50.2%. The New Orders index registered 53.3%, an increase of 3.6% over December’s seasonally adjusted reading of 49.7%, indicating a nice jump in new orders.
“Manufacturing is starting out the year on a positive note,” commented Bradley J. Holcomb, CPSM, CPSD, chair of the ISM’s Manufacturing Business Survey Committee, “with all five of the PMI’s component indexes—new orders, production, employment, supplier deliveries and inventories—registering above 50% in January.”
Those in the plastics industry will be happy to know that of the 13 out of 18 industries reporting growth in January, Plastics & Rubber Products made the top spot in the ranking. Among the commodities up in price, the ISM’s list contained many plastics and chemicals to make plastics, including benzene, HDPE, PET bottles, polypropylene, and polystyrene.
The U.S. Census Bureau’s report on Manufacturers’ Shipments, Inventories and Orders for December 2012, showed that new orders for manufactured goods increased in December 1.8% to $484.8 billion. However, most of that increase was in transportation.
Excluding transportation, new orders increased just 0.2%. Shipments, which were up for five of the last six months of 2012, increased $1.8 billion or 0.4% to $484.9 billion. Unfilled orders also saw an increase in six of the last seven months of 2012, with December up $7.9 billion or 0.8% to $991.7 billion. Inventories of durable goods in December were down $0.1 billion to $374.5 billion following 14 consecutive monthly increases.