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Manufacturing PMI® at 46.7%; November 2023 Manufacturing ISM® Report On Business®


New Orders and Backlogs Contracting; Employment and Production Contracting; Supplier Deliveries Faster; Raw Materials Inventories Contracting; Customers' Inventories Too High; Prices Decreasing; Exports and Imports Contracting

TEMPE, Ariz., Dec. 1, 2023 /PRNewswire/ -- Economic activity in the manufacturing sector contracted in November for the 13th consecutive month following a 28-month period 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 Manufacturing PMI® registered 46.7 percent in November, unchanged from the 46.7 percent recorded in October. The overall economy continued in contraction for a second month after one month of weak expansion preceded by nine months of contraction and a 30-month period of expansion before that. (A Manufacturing PMI® above 48.7 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index remained in contraction territory at 48.3 percent, 2.8 percentage points higher than the figure of 45.5 percent recorded in October. The Production Index reading of 48.5 percent is a 1.9-percentage point decrease compared to October's figure of 50.4 percent. The Prices Index registered 49.9 percent, up 4.8 percentage points compared to the reading of 45.1 percent in October. The Backlog of Orders Index registered 39.3 percent, 2.9 percentage points lower than the October reading of 42.2 percent. The Employment Index registered 45.8 percent, down 1 percentage point from the 46.8 percent reported in October.

"The Supplier Deliveries Index figure of 46.2 percent is 1.5 percentage points lower than the 47.7 percent recorded in October. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

"The Inventories Index increased by 1.5 percentage points to 44.8 percent; the October reading was 43.3 percent. The New Export Orders Index reading of 46 percent is 3.4 percentage points lower than October's figure of 49.4 percent. The Imports Index remained in contraction territory, registering 46.2 percent, 1.7 percentage points lower than the 47.9 percent reported in October."

Fiore continues, "The U.S. manufacturing sector continued to contract at the same rate in November as compared to October, again posting a reading of 46.7 percent. Companies are still managing outputs appropriately as order softness continues. Demand eased, with the (1) New Orders Index contracting but at a slower rate, (2) New Export Orders Index dropping further into contraction territory, and (3) Backlog of Orders Index dropping below 40 percent (39.3 percent) to remain in strong contraction territory. The Customers' Inventories Index reading moved into expansion, toward the upper end of 'about right' territory, not accommodative for future production. Output/Consumption (measured by the Production and Employment indexes) was negative, with a combined 2.9-percentage point downward impact on the Manufacturing PMI® calculation. Panelists' companies slightly reduced month-over-month production and took more actions to reduce head counts, primarily using layoffs and attrition. Inputs ? defined as supplier deliveries, inventories, prices and imports ? continued to accommodate future demand growth. The Supplier Deliveries Index indicated faster deliveries for the 14th straight month, at a faster rate compared to October, and the Inventories Index moved upward while remaining in moderate contraction territory. The Prices Index remained in 'decreasing' territory (but just barely), signifying price stability as a result of energy markets easing, though offset by increases in the steel markets. Manufacturing supplier lead times continue to decrease, a positive for future economic activity.

"Of the six biggest manufacturing industries, two ? Food, Beverage & Tobacco Products; and Transportation Equipment ? registered growth in November.

"Demand remains soft, and production execution is slightly down compared to October as panelists' companies continue to manage outputs, material inputs and ? more aggressively ? labor costs. Suppliers continue to have capacity. Sixty-five percent of manufacturing gross domestic product (GDP) contracted in November, down from 75 percent in October. More importantly, the share of sector GDP registering a composite PMI® calculation at or below 45 percent ? a good barometer of overall manufacturing weakness ? was 54 percent in November, compared to 35 percent in October and 6 percent in September. Three of the top six industries by contribution to manufacturing GDP were at or below 45 percent, same as the previous month," says Fiore.

The three manufacturing industries that reported growth in November are: Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; and Transportation Equipment. The 14 industries reporting contraction in November ? in the following order ? are: Paper Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Apparel, Leather & Allied Products; Textile Mills; Machinery; Primary Metals; Furniture & Related Products; Miscellaneous Manufacturing; Chemical Products; Fabricated Metal Products; Wood Products; and Plastics & Rubber Products.

WHAT RESPONDENTS ARE SAYING

 

MANUFACTURING AT A GLANCE
November 2023

Index

Series
Index

Nov

Series
Index

Oct

Percentage

Point

Change

Direction

Rate of
Change

Trend*
(Months)

Manufacturing
PMI®

46.7

46.7

0.0

Contracting

Same

13

New Orders

48.3

45.5

+2.8

Contracting

Slower

15

Production

48.5

50.4

-1.9

Contracting

From Growing

1

Employment

45.8

46.8

-1.0

Contracting

Faster

2

Supplier
Deliveries

46.2

47.7

-1.5

Faster

Faster

14

Inventories

44.8

43.3

+1.5

Contracting

Slower

9

Customers'
Inventories

50.8

48.6

+2.2

Too High

From Too
Low

1

Prices

49.9

45.1

+4.8

Decreasing

Slower

7

Backlog of
Orders

39.3

42.2

-2.9

Contracting

Faster

14

New Export
Orders

46.0

49.4

-3.4

Contracting

Faster

6

Imports

46.2

47.9

-1.7

Contracting

Faster

13

OVERALL ECONOMY

Contracting

Same

2

Manufacturing Sector

Contracting

Same

13

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
Cocoa; Electrical Components; Electronic Components (3); Labor ? Temporary (3); Natural Gas (5); Polyethylene; Polypropylene (2); Steel (5); Steel ? Carbon; Steel ? Cold Rolled; and Steel ? Hot Rolled.

Commodities Down in Price
Aluminum (6); Corrugated Boxes (4); Crude Oil; Diesel; Nickel; and Steel Products (6).

Commodities in Short Supply
Electrical Components (38); Electrical Equipment (2); Electronic Components (36); and Semiconductors.

Note: The number of consecutive months the commodity is listed is indicated after each item.

NOVEMBER 2023 MANUFACTURING INDEX SUMMARIES

Manufacturing PMI®
The U.S. manufacturing sector contracted in November, as the Manufacturing PMI® registered 46.7 percent, the same figure recorded in October. "This is the 13th month of contraction. All of the five subindexes that directly factor into the Manufacturing PMI® are in contraction territory, up from four in October. The New Orders Index logged its 15th month in contraction territory, but at a slower rate in November. Of the six biggest manufacturing industries, two ? Food, Beverage & Tobacco Products; and Transportation Equipment ? registered growth in November," says Fiore. A reading above 50 percent indicates that the manufacturing sector is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI® above 48.7 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the November Manufacturing PMI® indicates the overall economy contracted for a second straight month after one month of growth preceded by nine consecutive months of contraction and 30 months of expansion from June 2020 to November 2022. "The past relationship between the Manufacturing PMI® and the overall economy indicates that the November reading (46.7 percent) corresponds to a change of minus-0.7 percent in real gross domestic product (GDP) on an annualized basis," says Fiore.

THE LAST 12 MONTHS

Month

Manufacturing
PMI®

Month

Manufacturing
PMI®

Nov 2023

46.7

May 2023

46.9

Oct 2023

46.7

Apr 2023

47.1

Sep 2023

49.0

Mar 2023

46.3

Aug 2023

47.6

Feb 2023

47.7

Jul 2023

46.4

Jan 2023

47.4

Jun 2023

46.0

Dec 2022

48.4

Average for 12 months ? 47.2

High ? 49.0

Low ? 46.0

New Orders
ISM®'s New Orders Index contracted for the 15th consecutive month in November, registering 48.3 percent, an increase of 2.8 percentage points compared to October's reading of 45.5 percent. "Of the six largest manufacturing sectors, only Food, Beverage & Tobacco Products reported increased new orders. New order levels contracted at a slower rate compared to October as a result of continuing sluggishness in three capital-focused industries (Computer & Electronic Products; Machinery; and Fabricated Metal Products) that are among the seven biggest by share of manufacturing GDP. The index registered its second-highest reading since August 2022, when the index recorded 50.4 percent," says Fiore. A New Orders Index above 52.7 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

The two manufacturing industries that reported growth in new orders in November are: Food, Beverage & Tobacco Products; and Plastics & Rubber Products. Thirteen industries reported a decline in new orders in November, in the following order: Electrical Equipment, Appliances & Components; Textile Mills; Wood Products; Furniture & Related Products; Paper Products; Computer & Electronic Products; Machinery; Nonmetallic Mineral Products; Fabricated Metal Products; Chemical Products; Primary Metals; Miscellaneous Manufacturing; and Transportation Equipment.

New Orders

%Higher

%Same

%Lower

Net

Index

Nov 2023

19.5

53.0

27.5

-8.0

48.3

Oct 2023

15.4

58.1

26.5

-11.1

45.5

Sep 2023

18.5

59.2

22.3

-3.8

49.2

Aug 2023

17.2

59.9

22.9

-5.7

46.8

Production
The Production Index dropped into contraction territory in November, registering 48.5 percent, 1.9 percentage points lower than the October reading of 50.4 percent. This follows two months of expansion preceded by one month of "unchanged" status and two months of contraction. "Of the top six industries, two ? Food, Beverage & Tobacco Products; and Transportation Equipment ? expanded in November. Production output in November was marginally down compared to the previous month. Panelists' companies are meeting customer demand, as demonstrated by the Customers' Inventories Index registering above 50 percent, or on the high side of 'about right,' " says Fiore. An index above 52.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.

The five industries reporting growth in production during the month of November are: Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Transportation Equipment; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components. The six industries reporting a decrease in production in November ? in the following order ? are: Paper Products; Computer & Electronic Products; Chemical Products; Miscellaneous Manufacturing; Machinery; and Primary Metals. Seven industries reported no change in production in November compared to October.

Production

%Higher

%Same

%Lower

Net

Index

Nov 2023

18.4

62.1

19.5

-1.1

48.5

Oct 2023

17.3

62.9

19.8

-2.5

50.4

Sep 2023

21.6

59.9

18.5

+3.1

52.5

Aug 2023

21.0

58.7

20.3

+0.7

50.0

Employment
ISM®'s Employment Index registered 45.8 percent in November, 1 percentage point lower than the October reading of 46.8 percent. "The index indicated employment contracted again in November after one month of expansion and three months of contraction before that. Of the six big manufacturing sectors, three (Food, Beverage & Tobacco Products; Transportation Equipment; and Chemical Products) expanded. Labor management sentiment at Business Survey Committee respondents' companies continues to indicate a slowdown in hiring and, in November, an increase in staff-reduction activity. Attrition, freezes and layoffs to reduce head counts increased during the period, with layoffs and attrition the primary measures. Panelists' comments were equally split between companies hiring and others reducing their labor forces ? a first since such comments have been tracked," says Fiore. An Employment Index above 50.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of 18 manufacturing industries, three reported employment growth in November: Food, Beverage & Tobacco Products; Transportation Equipment; and Chemical Products. The nine industries reporting a decrease in employment in November, in the following order, are: Printing & Related Support Activities; Primary Metals; Paper Products; Textile Mills; Computer & Electronic Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; and Machinery. Six industries reported no change in employment in November compared to October.

Employment

%Higher

%Same

%Lower

Net

Index

Nov 2023

9.3

71.3

19.4

-10.1

45.8

Oct 2023

11.7

70.9

17.4

-5.7

46.8

Sep 2023

15.4

68.2

16.4

-1.0

51.2

Aug 2023

14.0

68.0

18.0

-4.0

48.5

Supplier Deliveries?
Delivery performance of suppliers to manufacturing organizations was faster for the 14th straight month in November, as the Supplier Deliveries Index registered 46.2 percent, 1.5 percentage points lower than the 47.7 percent reported in October. After registering 52.4 percent in September 2022, the index went into contraction territory in October and has been there since, with an average reading of 45.8 percent over the last 12 months. Of the top six manufacturing industries, only Food, Beverage & Tobacco Products reported slower deliveries, reflecting the industry's seasonality. "Panelists' comments continue to indicate that suppliers' performance is improving," says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The three manufacturing industries reporting slower supplier deliveries in November are: Wood Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The nine industries reporting faster supplier deliveries in November ? in the following order ? are: Paper Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Chemical Products; Computer & Electronic Products; Machinery; Primary Metals; Fabricated Metal Products; and Transportation Equipment. Six industries reported no change in delivery performance in November compared to October.

Supplier Deliveries

%Slower

%Same

%Faster

Net

Index

Nov 2023

6.3

79.7

14.0

-7.7

46.2

Oct 2023

9.8

75.7

14.5

-4.7

47.7

Sep 2023

5.8

81.1

13.1

-7.3

46.4

Aug 2023

10.9

75.4

13.7

-2.8

48.6

Inventories
The Inventories Index registered 44.8 percent in November, 1.5 percentage points higher than the 43.3 percent reported in October. "Manufacturing inventories contracted at a slower rate compared to the previous month. Of the six big industries, only Food, Beverage & Tobacco Products increased manufacturing inventories in November, reflecting the industry's seasonality. Panelists' companies continue to manage manufacturing inventory levels down, as demand remains uncertain for the first quarter of 2024," says Fiore. An Inventories Index greater than 44.4 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

Of 18 manufacturing industries, three reported higher inventories in November: Nonmetallic Mineral Products; Primary Metals; and Food, Beverage & Tobacco Products. The 14 industries reporting lower inventories in November ? in the following order ? are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Wood Products; Textile Mills; Furniture & Related Products; Machinery; Electrical Equipment, Appliances & Components; Paper Products; Computer & Electronic Products; Fabricated Metal Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Chemical Products; and Transportation Equipment.

Inventories

%Higher

%Same

%Lower

Net

Index

Nov 2023

13.8

59.7

26.5

-12.7

44.8

Oct 2023

12.6

63.8

23.6

-11.0

43.3

Sep 2023

11.7

68.1

20.2

-8.5

45.8

Aug 2023

10.4

70.2

19.4

-9.0

44.0

Customers' Inventories?
ISM®'s Customers' Inventories Index registered 50.8 percent in November, up 2.2 percentage points compared to the 48.6 reported in October. The index recorded its highest performance since May 2023, when it registered 51.4 percent. "Customers' inventory levels moved higher, into the upper end of 'just right,' as panelists report their companies' customers have an appropriate amount of their products in inventory. That is considered negative for future production," says Fiore.

The eight industries reporting customers' inventories as too high in November ? in the following order ? are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Furniture & Related Products; Fabricated Metal Products; Transportation Equipment; Chemical Products; Electrical Equipment, Appliances & Components; and Primary Metals. The four industries reporting customers' inventories as too low in November are: Food, Beverage & Tobacco Products; Plastics & Rubber Products; Miscellaneous Manufacturing; and Machinery. Six industries reported no change in customers' inventories in November compared to October.

Customers'
Inventories

%
Reporting

%Too
High

%About
Right

%Too
Low

 

Net

 

Index

Nov 2023

76

16.3

69.0

14.7

+1.6

50.8

Oct 2023

75

13.1

71.0

15.9

-2.8

48.6

Sep 2023

76

14.7

64.7

20.6

-5.9

47.1

Aug 2023

75

14.9

67.6

17.5

-2.6

48.7

Prices?
The ISM® Prices Index registered 49.9 percent, 4.8 percentage points higher compared to the October reading of 45.1 percent, indicating raw materials prices decreased in November for the seventh consecutive month, though just barely and essentially flat month over month. The index has been in contraction (or "decreasing") territory since May, but a higher reading compared to October indicated a slower rate of price decreases. "Panelists' comments indicate that buyers and suppliers continue to negotiate price levels for 2024, with commodity markets remaining highly volatile. Recent decreases in energy markets are being offset by increases in the steel markets. Two of the top six manufacturing industries (Machinery; and Food, Beverage & Tobacco Products) reported price increases in November. Eighty-four percent of panelists' companies reported 'same' or 'lower' prices in November, compared to 89 percent in October," says Fiore. A Prices Index above 52.9 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

In November, the seven industries that reported paying increased prices for raw materials ? in the following order ? are: Plastics & Rubber Products; Fabricated Metal Products; Primary Metals; Machinery; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Nonmetallic Mineral Products. The six industries reporting paying decreased prices for raw materials in November ? in the following order ? are: Textile Mills; Furniture & Related Products; Petroleum & Coal Products; Chemical Products; Computer & Electronic Products; and Transportation Equipment.

Prices

%Higher

%Same

%Lower

Net

Index

Nov 2023

16.0

67.7

16.3

-0.3

49.9

Oct 2023

11.0

68.1

20.9

-9.9

45.1

Sep 2023

12.9

61.7

25.4

-12.5

43.8

Aug 2023

16.4

63.9

19.7

-3.3

48.4

Backlog of Orders?
ISM®'s Backlog of Orders Index registered 39.3 percent, a 2.9-percentage point decrease compared to October's reading of 42.2 percent, indicating order backlogs contracted for the 14th consecutive month (and at a faster rate in November) after a 27-month period of expansion. None of the six largest manufacturing sectors expanded order backlogs in November. The index recorded its lowest level since June 2023, when it registered 38.7 percent. "For the third straight month, the index remains in strong contraction as production rates and new order levels continue to have a negative effect on backlogs," says Fiore.

No industries reported growth in order backlogs in November. The 15 industries reporting lower backlogs in November ? in the following order ? are: Printing & Related Support Activities; Wood Products; Textile Mills; Primary Metals; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Furniture & Related Products; Machinery; Fabricated Metal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; and Transportation Equipment.

Backlog of
Orders

%
Reporting

 

%Higher

 

%Same

 

%Lower

 

Net

 

Index

Nov 2023

91

9.3

60.0

30.7

-21.4

39.3

Oct 2023

92

15.2

54.0

30.8

-15.6

42.2

Sep 2023

93

12.4

60.0

27.6

-15.2

42.4

Aug 2023

90

14.9

58.3

26.8

-11.9

44.1

New Export Orders?
ISM®'s New Export Orders Index registered 46 percent in November, 3.4 percentage points lower than the October reading of 49.4 percent. "The New Export Orders Index indicated that export orders contracted for the sixth consecutive month in November; the index has shown weak performance for the last 16 months. Comments continue to note overall weakness," says Fiore.

The six industries reporting growth in new export orders in November ? in the following order ? are: Nonmetallic Mineral Products; Paper Products; Primary Metals; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; and Chemical Products. The six industries reporting a decrease in new export orders in November ? in the following order ? are: Wood Products; Fabricated Metal Products; Computer & Electronic Products; Transportation Equipment; Electrical Equipment, Appliances & Components; and Machinery.

New Export
Orders

%
Reporting

 

%Higher

 

%Same

 

%Lower

 

Net

 

Index

Nov 2023

71

7.7

76.6

15.7

-8.0

46.0

Oct 2023

72

12.3

74.1

13.6

-1.3

49.4

Sep 2023

73

8.0

78.8

13.2

-5.2

47.4

Aug 2023

73

7.6

77.7

14.7

-7.1

46.5

Imports?
ISM®'s Imports Index registered 46.2 percent in November, a decrease of 1.7 percentage points compared to October's figure of 47.9 percent. "Imports contracted for the 13th consecutive month, at a faster rate in November. For the second month, reduced imports remain consistent with slowing demand. Shipping capacity and prices remain accommodative," says Fiore.

The three industries reporting an increase in import volumes in November are: Food, Beverage & Tobacco Products; Fabricated Metal Products; and Transportation Equipment. The 10 industries that reported lower volumes of imports in November ? listed in the following order ? are: Wood Products; Textile Mills; Furniture & Related Products; Computer & Electronic Products; Nonmetallic Mineral Products; Primary Metals; Miscellaneous Manufacturing; Machinery; Electrical Equipment, Appliances & Components; and Chemical Products.

Imports

%
Reporting

 

%Higher

 

%Same

 

%Lower

 

Net

 

Index

Nov 2023

83

8.2

76.0

15.8

-7.6

46.2

Oct 2023

81

7.1

81.5

11.4

-4.3

47.9

Sep 2023

84

8.3

79.7

12.0

-3.7

48.2

Aug 2023

84

7.2

81.5

11.3

-4.1

48.0

?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
The average commitment lead time for Capital Expenditures in November was 178 days, an increase of seven days compared to October. Average lead time in November for Production Materials was 79 days, a decrease of four days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies was 43 days, a decrease of three days compared to October. 

Percent Reporting

Capital
Expenditures

Hand-to-
Mouth

30 Days

60 Days

90 Days

6 Months

1 Year+

Average
Days

Nov 2023

14

3

9

14

32

28

178

Oct 2023

16

3

10

13

32

26

171

Sep 2023

16

2

10

13

33

26

172

Aug 2023

17

3

8

14

32

26

170

 

Percent Reporting

Production
Materials

Hand-to-
Mouth

30 Days

60 Days

90 Days

6 Months

1 Year+

Average
Days

Nov 2023

8

24

29

26

9

4

79

Oct 2023

7

24

27

26

12

4

83

Sep 2023

8

22

28

27

10

5

84

Aug 2023

8

22

28

26

10

6

87

 

Percent Reporting

MRO Supplies

Hand-to-
Mouth

30 Days

60 Days

90 Days

6 Months

1 Year+

Average
Days

Nov 2023

29

35

21

10

5

0

43

Oct 2023

29

33

21

11

5

1

46

Sep 2023

26

38

18

14

4

0

43

Aug 2023

27

38

18

13

4

0

42

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 November 2023.

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 2021 GDP (released December 22, 2022), the six largest manufacturing subsectors are: Computer & Electronic Products; Chemical Products; Transportation Equipment; Food, Beverage & Tobacco Products; Machinery; and Petroleum & Coal Products.

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, and Inventories (seasonally adjusted).

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 48.7 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 48.7 percent, it is generally declining. The distance from 50 percent or 48.7 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.

ISM ROB Content
The Institute for Supply Management® ("ISM") Report On Business® (both Manufacturing and Non-Manufacturing) ("ISM ROB") contains information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content (collectively, "Content") of ISM ("ISM ROB Content"). ISM ROB Content is protected by copyright, trademark, trade secret, and other laws, and as between you and ISM, ISM owns and retains all rights in the ISM ROB Content. ISM hereby grants you a limited, revocable, nonsublicensable license to access and display on your individual device the ISM ROB Content (excluding any software code) solely for your personal, non-commercial use. The ISM ROB Content shall also contain Content of users and other ISM licensors. Except as provided herein or as explicitly allowed in writing by ISM, you shall not copy, download, stream, capture, reproduce, duplicate, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any ISM ROB Content.

Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, data streams, time-series variables, fonts, icons, link buttons, wallpaper, desktop themes, online postcards, montages, mashups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. This prohibition applies regardless of whether the derivative works or materials are sold, bartered, or given away. You shall not either directly or through the use of any device, software, internet site, web-based service, or other means remove, alter, bypass, avoid, interfere with, or circumvent any copyright, trademark, or other proprietary notices marked on the Content or any digital rights management mechanism, device, or other content protection or access control measure associated with the Content including geo-filtering mechanisms. Without prior written authorization from ISM, you shall not build a business utilizing the Content, whether or not for profit.

You shall not create, recreate, distribute, incorporate in other work, or advertise an index of any portion of the Content unless you receive prior written authorization from ISM. Requests for permission to reproduce or distribute ISM ROB Content can be made by contacting in writing at: ISM Research, Institute for Supply Management, 309 West Elliot Road, Suite 113, Tempe, Arizona 85284-1556, or by emailing [email protected]. Subject: Content Request.

ISM shall not have any liability, duty, or obligation for or relating to the ISM ROB Content or other information contained herein, any errors, inaccuracies, omissions or delays in providing any ISM ROB Content, or for any actions taken in reliance thereon. In no event shall ISM be liable for any special, incidental, or consequential damages, arising out of the use of the ISM ROB. Report On Business®, PMI®, Manufacturing PMI®, Services PMI®, Hospital PMI®, and NMI® are registered trademarks of Institute for Supply Management®. Institute for Supply Management® and ISM® are registered trademarks of Institute for Supply Management, Inc.

About Institute for Supply Management® (ISM®)
Institute for Supply Management® (ISM®) is the first and leading not-for-profit professional supply management organization worldwide. Its community of more than 50,000 in more than 100 countries manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 by practitioners, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM empowers and leads the profession through the ISM® Report On Business®, its highly-regarded certification and training programs, corporate services, events and assessments. The ISM® Report On Business®, Manufacturing, Services, and Hospital, are three of the most reliable economic indicators available, providing guidance to supply management professionals, economists, analysts, and government and business leaders. For more information, please visit: www.ismworld.org.

The full text version of the Manufacturing ISM® Report On Business® is posted on ISM®'s website at www.ismrob.org on the first business day* of every month after 10:00 a.m. ET. The one exception is in January, the report is released on the second business day of the month.

The next Manufacturing ISM® Report On Business® featuring December 2023 data will be released at 10:00 a.m. ET on Wednesday, January 3, 2024.

*Unless the New York Stock Exchange is closed.

Contact:

Kristina Cahill


Report On Business® Analyst


ISM®, ROB/Research Manager


Tempe, Arizona


+1 480.455.5910


Email: [email protected]

 

Institute for Supply Management logo. (PRNewsFoto/Institute for Supply Management) (PRNewsfoto/Institute for Supply Management)

 

SOURCE Institute for Supply Management


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