New Orders, Production and Employment Growing; Supplier
Deliveries Slowing at a Slower Rate; Backlog Growing; Raw Materials
Inventories Growing; Customers' Inventories Too Low; Prices
Increasing; Exports and Imports Growing
TEMPE, Ariz., Jan. 4, 2022 /PRNewswire/ -- Economic
activity in the manufacturing sector grew in
December, with the overall economy achieving
a 19th consecutive month of growth, say the nation's supply
executives in the latest Manufacturing
ISM® Report On
Business®.
The report was issued today by Timothy
R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply
Management® (ISM®) Manufacturing
Business Survey Committee:
"The December Manufacturing PMI® registered 58.7
percent, a decrease of 2.4 percentage points from the
November reading of 61.1 percent. This figure indicates
expansion in the overall economy for the 19th month in a row after
a contraction in April 2020. The New
Orders Index registered 60.4 percent, down 1.1 percentage points
compared to the November reading of 61.5 percent. The Production
Index registered 59.2 percent, a decrease of 2.3 percentage points
compared to the November reading of 61.5 percent. The Prices Index
registered 68.2 percent, down 14.2 percentage points compared to
the November figure of 82.4 percent. The Backlog of Orders Index
registered 62.8 percent, 0.9 percentage point higher than the
November reading of 61.9 percent. The Employment Index registered
54.2 percent, 0.9 percentage point higher compared to the November
reading of 53.3 percent. The Supplier Deliveries Index registered
64.9 percent, down 7.3 percentage points from the November figure
of 72.2 percent. The Inventories Index registered 54.7 percent, 2.1
percentage points lower than the November reading of 56.8 percent.
The New Export Orders Index registered 53.6 percent, a decrease of
0.4 percentage point compared to the November reading of 54
percent. The Imports Index registered 53.8 percent, a
1.2-percentage point increase from the November reading of 52.6
percent."
Fiore continues, "The U.S. manufacturing sector remains in a
demand-driven, supply chain-constrained environment, with
indications of improvements in labor resources and supplier
delivery performance. Shortages of critical lowest-tier materials,
high commodity prices and difficulties in transporting products
continue to plague reliable consumption. Coronavirus
pandemic-related global issues — worker absenteeism, short-term
shutdowns due to parts shortages, employee turnover and overseas
supply chain problems — continue to impact manufacturing. However,
panel sentiment remains strongly optimistic, with six positive
growth comments for every cautious comment, down slightly from
November. The forecast released this month indicates a strong 2022
performance expectation in terms of revenue growth and
profitability. Demand expanded, with the (1) New Orders
Index growing, supported by continued expansion of new export
orders, (2) Customers' Inventories Index remaining at a very low
level and (3) Backlog of Orders Index staying at a very high level.
Consumption (measured by the Production and Employment
indexes) grew during the period, with a combined negative
1.4-percentage point change to the Manufacturing PMI®
calculation. The Employment Index expanded for a fourth straight
month, with some indications that ability to hire is improving,
though somewhat offset by the continued challenges of turnover and
backfilling. Inputs — expressed as supplier deliveries,
inventories, and imports — continued to constrain production
expansion, but there are clear signs of improved delivery
performance. The Supplier Deliveries Index again slowed while the
Inventories Index expanded, both at a slower rate. In December, the
Prices Index increased for the 19th consecutive month, at a slower
rate (a decrease of 14.2 percentage points), indicating that
supplier pricing power continues to rise, but to a lesser
degree.
"All of the six biggest manufacturing industries — Chemical
Products; Fabricated Metal Products; Computer & Electronic
Products; Food, Beverage & Tobacco Products; Transportation
Equipment; and Petroleum & Coal Products, in that order —
registered moderate-to-strong growth in December.
"Manufacturing performed well for the 19th straight month, with
demand and consumption registering month-over-month growth. Meeting
demand will remain a challenge, due to hiring difficulties and a
clear cycle of labor turnover at all tiers. For the second month in
a row, Business Survey Committee panelists' comments suggest
month-over-month improvement on hiring, offset by backfilling
required to address employee turnover. Supplier delivery rate
improvement was indicated by the Supplier Deliveries Index
softening in December. Transportation networks, a harbinger of
future supplier delivery performance, are still performing
erratically; however, there are signs of improvement," says
Fiore.
The 15 manufacturing industries reporting growth in December —
in the following order — are: Apparel, Leather &
Allied Products; Furniture & Related Products; Textile Mills;
Plastics & Rubber Products; Machinery; Nonmetallic Mineral
Products; Miscellaneous Manufacturing; Chemical Products;
Electrical Equipment, Appliances & Components; Fabricated Metal
Products; Computer & Electronic Products; Food, Beverage &
Tobacco Products; Transportation Equipment; Primary Metals; and
Petroleum & Coal Products. The three industries reporting a
decrease in December compared to November are: Wood Products;
Printing & Related Support Activities; and Paper Products.
WHAT RESPONDENTS ARE SAYING
- "Chemical supply chains are filling very slowly. Still not
full, but (my) gut feeling says it's getting easier to source
chemical raw materials." [Chemical Products]
- "Continued strong demand has our production facilities
producing as many vehicles as we have materials for; however,
capacity is limited due to the global chip shortage."
[Transportation Equipment]
- "Lowered oil prices due to (the) omicron variant has caused
concern around production and capital spend in 2022." [Petroleum
& Coal Products]
- "Labor is still tight, and turnover continues. Supply chain
issues are is still causing customer order cuts. Trucks are scarce,
and the teams are burned out from working long hours and dealing
with supply constraints daily." [Food, Beverage & Tobacco
Products]
- "Price increases appear to be slowing. Lead times are shrinking
slowly, and inventories are growing. I hope we have reached the top
of the hill to start down a gentle slope that lets us get back to
something that resembles normal." [Fabricated Metal Products]
- "Business continues to be good, with strong incoming orders
from customers. Continue to battle labor, material and
transportation pressures." [Furniture & Related Products]
- "Construction projects for 2022 and 2023 look very strong for
us." [Nonmetallic Mineral Products]
- "Costs for steel seem to be coming down some. We have seen a
little relief on steel prices, but they are still very high.
Overall performance by suppliers has improved. On-time deliveries
have improved." [Machinery]
- "Supply chain interruptions have dramatically increased in the
fourth quarter. Many of our suppliers are unable to deliver product
until January or February 2022 or
later." [Miscellaneous Manufacturing]
- "Very robust order activity. Backlog increased. Plastic raw
material shortages impact orders." [Plastics & Rubber
Products]
MANUFACTURING AT A
GLANCE
December 2021
|
Index
|
Series
Index
Dec
|
Series
Index
Nov
|
Percentage
Point
Change
|
Direction
|
Rate of
Change
|
Trend*
(Months)
|
Manufacturing
PMI®
|
58.7
|
61.1
|
-2.4
|
Growing
|
Slower
|
19
|
New
Orders
|
60.4
|
61.5
|
-1.1
|
Growing
|
Slower
|
19
|
Production
|
59.2
|
61.5
|
-2.3
|
Growing
|
Slower
|
19
|
Employment
|
54.2
|
53.3
|
+0.9
|
Growing
|
Faster
|
4
|
Supplier
Deliveries
|
64.9
|
72.2
|
-7.3
|
Slowing
|
Slower
|
70
|
Inventories
|
54.7
|
56.8
|
-2.1
|
Growing
|
Slower
|
5
|
Customers'
Inventories
|
31.7
|
25.1
|
+6.6
|
Too Low
|
Slower
|
63
|
Prices
|
68.2
|
82.4
|
-14.2
|
Increasing
|
Slower
|
19
|
Backlog of
Orders
|
62.8
|
61.9
|
+0.9
|
Growing
|
Faster
|
18
|
New Export
Orders
|
53.6
|
54.0
|
-0.4
|
Growing
|
Slower
|
18
|
Imports
|
53.8
|
52.6
|
+1.2
|
Growing
|
Faster
|
2
|
OVERALL
ECONOMY
|
Growing
|
Slower
|
19
|
Manufacturing
Sector
|
Growing
|
Slower
|
19
|
Manufacturing ISM® Report On
Business® data is seasonally
adjusted for the New Orders, Production, Employment and Inventories
indexes.
*Number of months moving in current direction.
COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT
SUPPLY
Commodities Up in Price
Adhesives and Paint; Aluminum*
(19); Capacitors; Corrugate (15); Corrugated Packaging (14); Diesel
Fuel (12); Electrical Components (13); Electronic Components (13);
Freight (14); Labor — Services; Labor — Temporary (8);
Logistics Services; Lubricants; Lumber; Natural Gas* (6); Nylon
(3); Ocean Freight (13); Packaging Supplies (13); Printed Circuit
Boards (PCBs); Resin Based Products (11); Resistors; Rubber Based
Products (5); Semiconductors (11); Silicone (2); Steel* (17); Steel
— Galvanized; Steel — Stainless (14); and Steel Products* (16).
Commodities Down in Price
Aluminum* (2); Crude Oil;
Ethylene; Natural Gas*; Polyethylene; Propylene; Steel* (2); and
Steel — Hot Rolled (2).
Commodities in Short Supply
Aluminum (2); Copper
Products; Electrical Cables; Electrical Components (15); Electronic
Components (13); Labor — Temporary (8); Plastic Resins — Other
(10); Rubber Based Products; Semiconductors (13); and Steel
(13).
Note: The number of consecutive months the commodity has
been listed is indicated after each item.
*Indicates those commodities reported both up and down in
price.
DECEMBER 2021 MANUFACTURING INDEX
SUMMARIES
Manufacturing PMI®
Manufacturing grew in
December, as the Manufacturing PMI® registered 58.7
percent, 2.4 percentage points lower than the November reading of
61.1 percent. "The Manufacturing PMI® continued to
indicate strong sector expansion and U.S. economic growth in
December. All five subindexes that directly factor into the
Manufacturing PMI® were in growth territory. All of the
six biggest manufacturing industries expanded, in the following
order: Chemical Products; Fabricated Metal Products; Computer
& Electronic Products; Food, Beverage & Tobacco Products;
Transportation Equipment; and Petroleum & Coal
Products. The New Orders and Production indexes remained at
strong levels. The Supplier Deliveries Index softened but continued
to reflect suppliers' difficulties in maintaining delivery rates.
All 10 of the subindexes were positive for the period; a reading of
'too low' for the Customers' Inventories Index is considered a
positive for future production," says Fiore. A reading above 50
percent indicates that the manufacturing economy is generally
expanding; below 50 percent indicates that it is generally
contracting.
A Manufacturing PMI® above 43.1 percent, over a
period of time, generally indicates an expansion of the overall
economy. Therefore, the December Manufacturing
PMI® indicates the overall economy grew in December for
the 19th consecutive month following contraction
in April 2020. "The past relationship between the
Manufacturing PMI® and the overall economy indicates
that the Manufacturing PMI® for December (58.7
percent) corresponds to a 4.4-percent increase in real gross
domestic product (GDP) on an annualized basis," says Fiore.
THE LAST 12 MONTHS
Month
|
Manufacturing
PMI®
|
|
Month
|
Manufacturing
PMI®
|
Dec 2021
|
58.7
|
|
Jun 2021
|
60.6
|
Nov 2021
|
61.1
|
|
May 2021
|
61.2
|
Oct 2021
|
60.8
|
|
Apr 2021
|
60.7
|
Sep 2021
|
61.1
|
|
Mar 2021
|
64.7
|
Aug 2021
|
59.9
|
|
Feb 2021
|
60.8
|
Jul 2021
|
59.5
|
|
Jan 2021
|
58.7
|
Average for 12 months
– 60.7
High –
64.7
Low – 58.7
|
New Orders
ISM®'s New Orders Index
registered 60.4 percent in December, a decrease of 1.1 percentage
points compared to the 61.5 percent reported in November. This
indicates that new orders grew for the 19th consecutive month. "All
of the six largest manufacturing sectors — Food, Beverage &
Tobacco Products; Petroleum & Coal Products; Chemical Products;
Fabricated Metal Products; Transportation Equipment; and Computer
& Electronic Products, in that order — expanded at
moderate-to-strong levels, up from just three the previous month,"
says Fiore. A New Orders Index above 52.8 percent, over time, is
generally consistent with an increase in the Census Bureau's series
on manufacturing orders (in constant 2000
dollars).
Thirteen of 18 manufacturing industries reported growth in new
orders in December, in the following order: Textile Mills;
Furniture & Related Products; Electrical Equipment, Appliances
& Components; Food, Beverage & Tobacco Products;
Miscellaneous Manufacturing; Petroleum & Coal Products; Primary
Metals; Machinery; Chemical Products; Fabricated Metal Products;
Transportation Equipment; Plastics & Rubber Products; and
Computer & Electronic Products. The two industries
reporting a decline in new orders in December are: Wood Products;
and Paper Products.
New Orders
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Dec 2021
|
24.6
|
64.6
|
10.8
|
+13.8
|
60.4
|
Nov 2021
|
23.4
|
66.0
|
10.6
|
+12.8
|
61.5
|
Oct 2021
|
29.7
|
58.3
|
12.0
|
+17.7
|
59.8
|
Sep 2021
|
36.6
|
54.3
|
9.1
|
+27.5
|
66.7
|
Production
The Production Index registered 59.2
percent in December, 2.3 percentage points lower than the
November reading of 61.5 percent, indicating growth for the
19th consecutive month. "Four of the top six industries — Chemical
Products; Computer & Electronic Products; Food, Beverage &
Tobacco Products; and Transportation Equipment — expanded at
moderate-to-strong levels. Raw material and labor shortages remain
a constraint to production growth, as suppliers continue to
struggle. Panelist sentiment on labor and material shortages
improved for a second month, albeit at a low level," says Fiore. An
index above 52.1 percent, over time, is generally consistent with
an increase in the Federal Reserve Board's Industrial Production
figures.
The 10 industries reporting growth in production during the
month of December — listed in order — are: Furniture & Related
Products; Plastics & Rubber Products; Textile Mills; Paper
Products; Chemical Products; Machinery; Computer & Electronic
Products; Food, Beverage & Tobacco Products; Transportation
Equipment; and Miscellaneous Manufacturing. The four industries
reporting a decrease in December are: Apparel, Leather & Allied
Products; Wood Products; Fabricated Metal Products; and Primary
Metals.
Production
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Dec 2021
|
25.6
|
57.0
|
17.4
|
+8.2
|
59.2
|
Nov 2021
|
30.3
|
57.3
|
12.4
|
+17.9
|
61.5
|
Oct 2021
|
31.3
|
54.3
|
14.4
|
+16.9
|
59.3
|
Sep 2021
|
31.6
|
53.1
|
15.3
|
+16.3
|
59.4
|
Employment
ISM®'s Employment Index
registered 54.2 percent in December, 0.9 percentage point
above the November reading of 53.3 percent. "The index reported a
fourth consecutive month of expansion. Of the six big manufacturing
sectors, three (Fabricated Metal Products; Chemical Products; and
Computer & Electronic Products) expanded. Survey panelists'
companies are still struggling to meet labor-management plans, but
for a fourth month, there were modest signs of progress: A stable
share of comments (7 percent in both December and November,
compared to 5 percent in October) noted greater hiring ease. An
overwhelming majority of panelists indicate their companies are
hiring or attempting to hire, as 85 percent of Employment Index
comments were hiring focused. Among those respondents, 37 percent
expressed difficulty in filling positions, a decrease from
November. A high level of comments regarding turnover rates
(backfills and retirements) in December continued a trend that
began in August," says Fiore. An Employment Index above 50.6
percent, over time, is generally consistent with an increase in the
Bureau of Labor Statistics (BLS) data on manufacturing
employment.
Of 18 manufacturing industries, eight industries reported
employment growth in December, in the following order: Apparel,
Leather & Allied Products; Nonmetallic Mineral Products;
Electrical Equipment, Appliances & Components; Plastics &
Rubber Products; Machinery; Fabricated Metal Products; Chemical
Products; and Computer & Electronic Products. The five
industries reporting a decrease in employment in December are:
Textile Mills; Wood Products; Paper Products; Food, Beverage &
Tobacco Products; and Miscellaneous Manufacturing.
Employment
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Dec 2021
|
15.5
|
72.2
|
12.3
|
+3.2
|
54.2
|
Nov 2021
|
20.5
|
64.6
|
14.9
|
+5.6
|
53.3
|
Oct 2021
|
21.3
|
62.8
|
15.9
|
+5.4
|
52.0
|
Sep 2021
|
17.0
|
65.7
|
17.3
|
-0.3
|
50.2
|
Supplier Deliveries†
The delivery
performance of suppliers to manufacturing organizations was slower
in December, as the Supplier Deliveries Index registered 64.9
percent, 7.3 percentage points lower than the 72.2 percent
reported in November. Five of the six top manufacturing industries
— Fabricated Metal Products; Food, Beverage & Tobacco Products;
Computer & Electronic Products; Chemical Products; and
Transportation Equipment — reported slowing deliveries.
"Deliveries slowed at a slower rate compared to the previous month.
The index continues to reflect suppliers' difficulties in meeting
panelist companies' demand, but for the second straight month,
supply chain performance is moving toward a more appropriate
balance with demand. Capital expenditure lead times continue at
modern-era records. Production materials lead times registered a
5-percent improvement from the prior month but remain at
near-record levels. The Supplier Deliveries Index, Prices Index and
material lead times softening in November and December indicate
progress against the supply/demand imbalance," says Fiore. A
reading below 50 percent indicates faster deliveries, while a
reading above 50 percent indicates slower deliveries.
Fourteen of 18 industries reported slower supplier deliveries in
December, in the following order: Apparel, Leather &
Allied Products; Textile Mills; Nonmetallic Mineral Products;
Furniture & Related Products; Miscellaneous Manufacturing;
Paper Products; Plastics & Rubber Products; Fabricated Metal
Products; Primary Metals; Food, Beverage & Tobacco Products;
Machinery; Computer & Electronic Products; Chemical Products;
and Transportation Equipment. The two industries reporting faster
supplier deliveries in December as compared to November are: Wood
Products; and Electrical Equipment, Appliances &
Components.
Supplier
Deliveries
|
%Slower
|
%Same
|
%Faster
|
Net
|
Index
|
Dec 2021
|
34.7
|
60.5
|
4.8
|
+29.7
|
64.9
|
Nov 2021
|
48.2
|
48.1
|
3.7
|
+44.5
|
72.2
|
Oct 2021
|
52.5
|
46.1
|
1.4
|
+51.1
|
75.6
|
Sep 2021
|
50.0
|
46.8
|
3.2
|
+46.8
|
73.4
|
Inventories
The Inventories Index registered 54.7
percent in December, 2.1 percentage points lower than the 56.8
percent reported for November. "Manufacturing inventories
continued to expand but at lower levels, as end-of-year working
capital targets are likely a cause of softening in the index. Also,
the index somewhat reflects an improved flow of raw materials to
factories," says Fiore. An Inventories Index greater than 44.5
percent, over time, is generally consistent with expansion in the
Bureau of Economic Analysis (BEA) figures on overall manufacturing
inventories (in chained 2000
dollars).
The 10 industries reporting higher inventories in December — in
the following order — are: Apparel, Leather & Allied Products;
Machinery; Miscellaneous Manufacturing; Chemical Products;
Furniture & Related Products; Electrical Equipment, Appliances
& Components; Fabricated Metal Products; Plastics & Rubber
Products; Transportation Equipment; and Computer & Electronic
Products. The four industries reporting a decrease in inventories
in December are: Printing & Related Support Activities;
Paper Products; Food, Beverage & Tobacco Products; and Primary
Metals.
Inventories
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Dec 2021
|
21.6
|
61.7
|
16.7
|
+4.9
|
54.7
|
Nov 2021
|
26.2
|
58.1
|
15.7
|
+10.5
|
56.8
|
Oct 2021
|
28.0
|
57.8
|
14.2
|
+13.8
|
57.0
|
Sep 2021
|
29.7
|
51.4
|
18.9
|
+10.8
|
55.6
|
Customers' Inventories†
ISM®'s
Customers' Inventories Index registered 31.7 percent in December,
6.6 percentage points higher than the 25.1 percent reported for
November, indicating that customers' inventory levels were
considered too low. "Customers' inventories are too low for
the 63rd consecutive month, a positive for future production
growth. For 17 straight months, the Customers' Inventories Index
has been at historically low levels," says Fiore.
No industries reported higher customers' inventories in
December. The 14 industries reporting customers' inventories as too
low during December — listed in order — are: Printing
& Related Support Activities; Nonmetallic Mineral Products;
Textile Mills; Paper Products; Fabricated Metal Products;
Machinery; Electrical Equipment, Appliances & Components;
Transportation Equipment; Miscellaneous Manufacturing; Computer
& Electronic Products; Chemical Products; Wood Products;
Furniture & Related Products; and Food, Beverage & Tobacco
Products.
Customers'
Inventories
|
%
Reporting
|
%Too High
|
%About
Right
|
%Too Low
|
Net
|
Index
|
Dec 2021
|
77
|
8.7
|
46.1
|
45.2
|
-36.5
|
31.7
|
Nov 2021
|
77
|
5.4
|
39.3
|
55.3
|
-49.9
|
25.1
|
Oct 2021
|
78
|
6.7
|
50.1
|
43.2
|
-36.5
|
31.7
|
Sep 2021
|
73
|
11.9
|
39.6
|
48.5
|
-36.6
|
31.7
|
Prices†
The
ISM® Prices Index registered 68.2 percent, a
decrease of 14.2 percentage points compared to the November reading
of 82.4 percent, indicating raw materials prices
increased for the 19th consecutive month, at a slower rate in
December. This is the 16th month in a row that the index has been
above 60 percent. "Aluminum; corrugate and packaging materials;
electrical and electronic components; energy; lumber; freight; and
some steels continue to remain at elevated prices due to product
scarcity amongst high demand," says Fiore. A Prices Index above
52.7 percent, over time, is generally consistent with an
increase in the Bureau of Labor Statistics (BLS) Producer Price
Index for Intermediate Materials.
In December, 16 industries reported paying increased
prices for raw materials, in the following order: Apparel,
Leather & Allied Products; Textile Mills; Furniture &
Related Products; Paper Products; Primary Metals; Miscellaneous
Manufacturing; Machinery; Computer & Electronic Products;
Chemical Products; Food, Beverage & Tobacco Products;
Nonmetallic Mineral Products; Fabricated Metal Products;
Transportation Equipment; Wood Products; Electrical Equipment,
Appliances & Components; and Plastics & Rubber Products.
Only one industry, Petroleum & Coal Products, reported paying
decreased prices for raw materials.
Prices
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Dec 2021
|
47.4
|
41.6
|
11.0
|
+36.4
|
68.2
|
Nov 2021
|
67.9
|
29.0
|
3.1
|
+64.8
|
82.4
|
Oct 2021
|
72.3
|
26.7
|
1.0
|
+71.3
|
85.7
|
Sep 2021
|
69.5
|
23.4
|
7.1
|
+62.4
|
81.2
|
Backlog of Orders†
ISM®'s
Backlog of Orders Index registered 62.8 percent in December, a
0.9-percentage point increase compared to the 61.9 percent reported
in November, indicating order backlogs expanded for the 18th
straight month. This is the 11th consecutive month with a reading
above 60 percent. "Backlogs expanded at a slightly faster rate in
December, indicating incoming business remains high. All six big
industry sectors (Petroleum & Coal Products; Transportation
Equipment; Fabricated Metal Products; Chemical Products; Food,
Beverage & Tobacco Products; and Computer & Electronic
Products, in that order), reported that backlogs expanded
strongly," says Fiore.
The 11 industries reporting growth in order backlogs in
December, in the following order, are: Apparel, Leather &
Allied Products; Textile Mills; Petroleum & Coal Products;
Transportation Equipment; Machinery; Fabricated Metal Products;
Chemical Products; Miscellaneous Manufacturing; Primary Metals;
Food, Beverage & Tobacco Products; and Computer &
Electronic Products. The only industry reporting lower
backlogs in December is Furniture & Related Products. Six
industries reported no change in backlogs of orders when comparing
December's levels to November.
Backlog of
Orders
|
%
Reporting
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Dec 2021
|
90
|
38.0
|
49.7
|
12.3
|
+25.7
|
62.8
|
Nov 2021
|
92
|
35.2
|
53.3
|
11.5
|
+23.7
|
61.9
|
Oct 2021
|
91
|
36.4
|
54.4
|
9.2
|
+27.2
|
63.6
|
Sep 2021
|
90
|
39.0
|
51.6
|
9.4
|
+29.6
|
64.8
|
New Export Orders†
ISM®'s New
Export Orders Index registered 53.6 percent in December, down
0.4 percentage point compared to the November reading of 54
percent. "The New Export Orders Index grew for the 18th consecutive
month, at a slightly slower rate. Of the six big industry sectors,
four (Food, Beverage & Tobacco Products; Computer &
Electronic Products; Chemical Products; and Transportation
Equipment) expanded. New export orders activity was a contributor
to the New Orders Index continuing in strong expansion territory,"
says Fiore.
The six industries reporting growth in new export orders in
December — in the following order — are: Plastics & Rubber
Products; Food, Beverage & Tobacco Products; Computer &
Electronic Products; Miscellaneous Manufacturing; Chemical
Products; and Transportation Equipment. The three industries
reporting a decrease in new export orders in December are: Textile
Mills; Paper Products; and Machinery. Seven industries reported no
change in exports in December as compared to November.
New Export
Orders
|
%
Reporting
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Dec 2021
|
75
|
10.8
|
85.5
|
3.7
|
+7.1
|
53.6
|
Nov 2021
|
76
|
11.3
|
85.5
|
3.2
|
+8.1
|
54.0
|
Oct 2021
|
75
|
12.7
|
83.9
|
3.4
|
+9.3
|
54.6
|
Sep 2021
|
75
|
14.1
|
78.6
|
7.3
|
+6.8
|
53.4
|
Imports†
ISM®'s Imports Index
registered 53.8 percent in December, an increase of 1.2
percentage points compared to November's figure of 52.6
percent. "Imports expanded in December for the second
consecutive month, in spite of continuing challenges with
throughput at U.S. ports of entry. Overland transport challenges
and container shortages continue to persist across the global
supply chain, causing instability with import-level projections.
Imports will continue to be challenged through the first half of
2022," says Fiore.
The six industries reporting growth in imports in
December — in the following order — are: Furniture &
Related Products; Petroleum & Coal Products; Computer &
Electronic Products; Food, Beverage & Tobacco Products;
Machinery; and Chemical Products. The five industries
reporting a decrease in imports in December are: Nonmetallic
Mineral Products; Fabricated Metal Products; Plastics & Rubber
Products; Transportation Equipment; and Miscellaneous
Manufacturing. Seven industries reported no change in imports in
December as compared to November.
Imports
|
%
Reporting
|
%Higher
|
%Same
|
%Lower
|
Net
|
Index
|
Dec 2021
|
83
|
17.9
|
71.8
|
10.3
|
+7.6
|
53.8
|
Nov 2021
|
87
|
14.1
|
77.0
|
8.9
|
+5.2
|
52.6
|
Oct 2021
|
86
|
12.5
|
73.3
|
14.2
|
-1.7
|
49.1
|
Sep 2021
|
87
|
20.0
|
69.8
|
10.2
|
+9.8
|
54.9
|
†The Supplier Deliveries, Customers' Inventories,
Prices, Backlog of Orders, New Export Orders, and Imports indexes
do not meet the accepted criteria for seasonal adjustments.
Buying Policy
Average commitment lead time for Capital
Expenditures in December was 161 days, an increase
of one day compared to November. Capital Expenditures lead times
have increased in 10 of the last 12 months for a net increase of 20
days since January 2021 (141 days).
Average lead time in December for Production
Materials decreased by five days to 91 days. Average lead time
for Maintenance, Repair and Operating (MRO) Supplies was
48 days, up four days compared to November.
Percent
Reporting
|
Capital
Expenditures
|
Hand-to-
Mouth
|
30 Days
|
60 Days
|
90 Days
|
6 Months
|
1 Year+
|
Average
Days
|
Dec 2021
|
21
|
3
|
11
|
11
|
29
|
25
|
161
|
Nov 2021
|
19
|
4
|
10
|
15
|
27
|
25
|
160
|
Oct 2021
|
19
|
5
|
9
|
15
|
29
|
23
|
156
|
Sep 2021
|
20
|
5
|
8
|
15
|
30
|
22
|
154
|
Percent
Reporting
|
Production
Materials
|
Hand-to-Mouth
|
30 Days
|
60 Days
|
90 Days
|
6 Months
|
1 Year+
|
Average
Days
|
Dec 2021
|
10
|
21
|
24
|
24
|
15
|
6
|
91
|
Nov 2021
|
10
|
21
|
22
|
26
|
13
|
8
|
96
|
Oct 2021
|
10
|
19
|
25
|
23
|
16
|
7
|
96
|
Sep 2021
|
10
|
20
|
29
|
22
|
11
|
8
|
92
|
Percent
Reporting
|
MRO
Supplies
|
Hand-to-
Mouth
|
30 Days
|
60 Days
|
90 Days
|
6 Months
|
1 Year+
|
Average
Days
|
Dec 2021
|
26
|
34
|
21
|
14
|
4
|
1
|
48
|
Nov 2021
|
29
|
34
|
21
|
12
|
3
|
1
|
44
|
Oct 2021
|
25
|
35
|
20
|
14
|
5
|
1
|
49
|
Sep 2021
|
26
|
38
|
20
|
11
|
4
|
1
|
45
|
About This Report
DO NOT CONFUSE THIS NATIONAL
REPORT with the various regional purchasing reports released across
the country. The national report's information reflects the entire
U.S., while the regional reports contain primarily regional data
from their local vicinities. Also, the information in the regional
reports is not used in calculating the results of the national
report. The information compiled in this report is for the month of
December 2021.
The data presented herein is obtained from a survey of
manufacturing supply executives based on information they have
collected within their respective organizations.
ISM® makes no representation, other than that
stated within this release, regarding the individual company data
collection procedures. The data should be compared to all
other economic data sources when used in decision-making.
Data and Method of Presentation
The Manufacturing
ISM® Report On Business® is based
on data compiled from purchasing and supply executives nationwide.
The composition of the Manufacturing Business Survey Committee is
stratified according to the North American Industry Classification
System (NAICS) and each of the following NAICS-based industry's
contribution to gross domestic product (GDP): Food, Beverage &
Tobacco Products; Textile Mills; Apparel, Leather & Allied
Products; Wood Products; Paper Products; Printing & Related
Support Activities; Petroleum & Coal Products; Chemical
Products; Plastics & Rubber Products; Nonmetallic Mineral
Products; Primary Metals; Fabricated Metal Products; Machinery;
Computer & Electronic Products; Electrical Equipment,
Appliances & Components; Transportation Equipment; Furniture
& Related Products; and Miscellaneous Manufacturing (products
such as medical equipment and supplies, jewelry, sporting goods,
toys and office supplies). The data are weighted based on each
industry's contribution to GDP. According to the BEA estimates for
2019 GDP (released December 22,
2020), the six largest manufacturing subsectors are:
Computer & Electronic Products; Chemical Products;
Transportation Equipment Manufacturing; Food, Beverage &
Tobacco Products; Petroleum & Coal Products; and Fabricated
Metal Products. Beginning in February
2018 with January 2018 data,
computation of the indexes is accomplished utilizing unrounded
numbers.
Survey responses reflect the change, if any, in the current
month compared to the previous month. For each of the indicators
measured (New Orders, Backlog of Orders, New Export Orders,
Imports, Production, Supplier Deliveries, Inventories, Customers'
Inventories, Employment and Prices), this report shows the
percentage reporting each response, the net difference between the
number of responses in the positive economic direction (higher,
better and slower for Supplier Deliveries) and the negative
economic direction (lower, worse and faster for Supplier
Deliveries), and the diffusion index. Responses are raw data and
are never changed. The diffusion index includes the percent of
positive responses plus one-half of those responding the same
(considered positive).
The resulting single index number for those meeting the criteria
for seasonal adjustments (Manufacturing PMI®, New
Orders, Production, Employment and Inventories) is then seasonally
adjusted to allow for the effects of repetitive intra-year
variations resulting primarily from normal differences in weather
conditions, various institutional arrangements, and differences
attributable to non-moveable holidays. All seasonal adjustment
factors are subject annually to relatively minor changes when
conditions warrant them. The Manufacturing PMI® is
a composite index based on the diffusion indexes of five of the
indexes with equal weights: New Orders (seasonally adjusted),
Production (seasonally adjusted), Employment (seasonally adjusted),
Supplier Deliveries (seasonally adjusted), and Inventories.
Diffusion indexes have the properties of leading indicators and
are convenient summary measures showing the prevailing direction of
change and the scope of change. A Manufacturing
PMI® reading above 50 percent indicates that the
manufacturing economy is generally expanding; below 50 percent
indicates that it is generally declining. A Manufacturing
PMI® above 43.1 percent, over a period of
time, indicates that the overall economy, or gross domestic product
(GDP), is generally expanding; below 43.1 percent, it is
generally declining. The distance from 50 percent or
43.1 percent is indicative of the extent of the expansion or
decline. With some of the indicators within this report,
ISM® has indicated the departure point between expansion
and decline of comparable government series, as determined by
regression analysis. The Manufacturing ISM® Report
On Business® survey is sent out to Manufacturing
Business Survey Committee respondents the first part of each month.
Respondents are asked to report on information for the current
month for U.S. operations only. ISM® receives survey
responses throughout most of any given month, with the majority of
respondents generally waiting until late in the month to submit
responses to give the most accurate picture of current business
activity. ISM® then compiles the report for release on
the first business day of the following month.
The industries reporting growth, as indicated in the
Manufacturing ISM® Report On
Business® monthly report, are listed in the
order of most growth to least growth. For the industries reporting
contraction or decreases, those are listed in the order of the
highest level of contraction/decrease to the least level of
contraction/decrease.
Responses to Buying Policy reflect the percent reporting the
current month's lead time, the approximate weighted number of days
ahead for which commitments are made for Capital Expenditures;
Production Materials; and Maintenance, Repair and Operating (MRO)
Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days,
90 days, six months (180 days), a year or more (360 days), and the
weighted average number of days. These responses are raw data,
never revised, and not seasonally adjusted since there is no
significant seasonal pattern.
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About Institute for Supply
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Institute for Supply
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Contact:
|
Kristina
Cahill
|
|
Report On
Business® Analyst
|
|
ISM®,
ROB/Research Manager
|
|
Tempe,
Arizona
|
|
+1
480.455.5910
|
|
Email:
kcahill@ismworld.org
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SOURCE Institute for Supply Management