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ISM Index still shows expanding manufacturing sector, including plasticsISM Index still shows expanding manufacturing sector, including plastics

The Institute for Supply Management shows expanding economic activity in the manufacturing sector for July. While the figure of 55.5 is down from June’s 56.2, this marks the 12th consecutive month that the manufacturing sector has expanded. The overall economy grew for the 15th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM “Report On Business."

PlasticsToday Staff

August 5, 2010

2 Min Read
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The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. “Manufacturing continued to grow during July, but at a slightly slower rate than in June. Employment, supplier deliveries and inventories improved during the month and reduced the impact of a month-over-month deceleration in new orders and production. July marks 12 consecutive months of growth in manufacturing, and indications are that demand is still quite strong in 10 of 18 industries. The prices that manufacturers paid for their inputs were slightly higher but stable, with only a few items on the short supply list.”

Ten of the 18 manufacturing industries are reporting growth in July, in the following order: Plastics & Rubber Products; Miscellaneous Manufacturing; Paper Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Primary Metals; Textile Mills; Computer & Electronic Products; Fabricated Metal Products; and Chemical Products. The four industries reporting contraction in July are: Nonmetallic Mineral Products; Furniture & Related Products; Food, Beverage & Tobacco Products; and Machinery.
 
ISM’s New Orders Index registered 53.5% in July, which is a decrease of 5 percentage points when compared to the 58.5% reported in June. This is the 13th consecutive month of growth in the New Orders Index. The eight industries reporting growth in new orders in July—listed in order—are: Plastics & Rubber Products; Paper Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Primary Metals; Transportation Equipment; Food, Beverage & Tobacco Products; and Fabricated Metal Products. Five industries reported decreases in new orders in July: Nonmetallic Mineral Products; Printing & Related Support Activities; Machinery; Chemical Products; and Furniture & Related Products.

The fact that plastics came in at the top of the 18 manufacturing industries tracked by the ISM bears out what we keep hearing on the street and that is that molders are relatively busy at this point, as their OEM customers are building products and stocking inventories.

Commodities that were down in price in July included machined steel parts; Polyethylene and Polypropylene Resins; and Steel. It was noted that steel was both up and down in price. However, this marks good news for both molders and moldmakers.

ISM’s Production Index registered 57% in July, which is a decrease of 4.4 percentage points from the June reading of 61.4%. This is the 14th consecutive month the Production Index has registered above 50%. Eight industries reported growth in production during the month of July and Plastics & Rubber Products came in second in this category. —[email protected]

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