March 2014 Manufacturing ISM® Report On Business®PMI® at 53.7%

March 2014 Manufacturing ISM® Report On Business® PMI® at 53.7%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, 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 March 2014.

New Orders, Employment and Production Growing
Inventories Growing
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in March for the 10th consecutive month, and the overall economy grew for the 58th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. “The March PMI® registered 53.7 percent, an increase of 0.5 percentage point from February’s reading of 53.2 percent, indicating expansion in manufacturing for the 10th consecutive month. The New Orders Index registered 55.1 percent, an increase of 0.6 percentage point from February’s reading of 54.5 percent. The Production Index registered 55.9 percent, a substantial increase of 7.7 percentage points compared to February’s reading of 48.2 percent. Employment grew for the ninth consecutive month, but at a lower rate by 1.2 percentage points, registering 51.1 percent compared to February’s reading of 52.3 percent. Several comments from the panel reflect favorable demand and good business conditions, with some lingering concerns about the particularly adverse weather conditions across the country.”
Of the 18 manufacturing industries, 14 are reporting growth in March in the following order: Petroleum & Coal Products; Transportation Equipment; Furniture & Related Products; Paper Products; Printing & Related Support Activities; Plastics & Rubber Products; Fabricated Metal Products; Machinery; Textile Mills; Computer & Electronic Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Chemical Products; and Primary Metals. The four industries reporting contraction in March are: Apparel, Leather & Allied Products; Wood Products; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing.
WHAT RESPONDENTS ARE SAYING …
 “Seeing improvement in the overall economy. Hearing strong bookings in residential contractor and home repair work.” (Paper Products)
 “First quarter business still strong.” (Fabricated Metal Products)
 “Business beginning to heat-up, along with the weather.” (Petroleum & Coal Products)
 “Business is good and we are optimistic that orders will continue to come in at a decent pace.” (Transportation Equipment)
 “Year starting off very good. Outlook very bright for 2014.” (Computer & Electronic Products)
 “Export orders are picking up — volume is improving although pricing, and thus profitability, are still challenged. Domestic business seems to be holding steady despite earlier predicted declines.” (Chemical Products)
 “Short supply of hardwood lumber continues to challenge sales’ ability to maximize volume targets. Demand is sound.” (Wood Products)
 “Weather has created major delays on inbound materials and outbound sales. We need spring.” (Food, Beverage & Tobacco Products)
 “Economy is looking positive and commodities are stable.” (Machinery)
 “Business continues to improve.” (Furniture & Related Products)
MANUFACTURING AT A GLANCE
MARCH 2014

Index Series
Index
Mar Series
Index
Feb Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI® 53.7 53.2 +0.5 Growing Faster 10
New Orders 55.1 54.5 +0.6 Growing Faster 10
Production 55.9 48.2 +7.7 Growing From Contracting 1
Employment 51.1 52.3 -1.2 Growing Slower 9
Supplier Deliveries 54.0 58.5 -4.5 Slowing Slower 10
Inventories 52.5 52.5 0.0 Growing Same 2
Customers’ Inventories 42.0 46.5 -4.5 Too Low Faster 28
Prices 59.0 60.0 -1.0 Increasing Slower 8
Backlog of Orders 57.5 52.0 +5.5 Growing Faster 2
Exports 55.5 53.5 +2.0 Growing Faster 16
Imports 54.5 53.5 +1.0 Growing Faster 14

OVERALL ECONOMY Growing Faster 58
Manufacturing Sector Growing Faster 10
Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum (2); Corn; Dairy (2); Diesel; Foam; Freight; Gasoline; HDPE (2); Lumber; MRO Supplies; Molybdenum; Nickel; Packaging (2); Plastic Resins (4); Polyethylene Resin; Stainless Steel; Steel* (4); and Wood (5).
Commodities Down in Price
Caustic Soda; Copper; Natural Gas; Steel*; Steel — Hot Rolled.
Commodities in Short Supply
The only commodity reported in short supply is Helium.
Note: The number of consecutive months the commodity is listed is indicated after each item.
*Reported as both up and down in price.

________________________________________
MARCH 2014 MANUFACTURING INDEX SUMMARIES
________________________________________
PMI®
Manufacturing expanded in March as the PMI® registered 53.7 percent, an increase of 0.5 percentage points when compared to February’s reading of 53.2 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI® in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the March PMI®indicates growth for the 58th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the 10th consecutive month. Holcomb stated, “The past relationship between the PMI® and the overall economy indicates that the average PMI® for January through March (52.7 percent) corresponds to a 3.1 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI® for March (53.7 percent) is annualized, it corresponds to a 3.5 percent increase in real GDP annually.”
THE LAST 12 MONTHS
Month PMI® Month PMI®
Mar 2014 53.7 Sep 2013 56.0
Feb 2014 53.2 Aug 2013 56.3
Jan 2014 51.3 Jul 2013 54.9
Dec 2013 56.5 Jun 2013 52.5
Nov 2013 57.0 May 2013 50.0
Oct 2013 56.6 Apr 2013 50.0
Average for 12 months – 54.0
High – 57.0
Low – 50.0

New Orders
ISM®’s New Orders Index registered 55.1 percent in March, an increase of 0.6 percentage point when compared to the February reading of 54.5 percent. This represents growth in new orders for the 10th consecutive month. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The 11 industries reporting growth in new orders in March — listed in order — are: Textile Mills; Transportation Equipment; Machinery; Petroleum & Coal Products; Furniture & Related Products; Paper Products; Fabricated Metal Products; Primary Metals; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Chemical Products. The three industries reporting a decrease in new orders during March are: Apparel, Leather & Allied Products; Wood Products; and Electrical Equipment, Appliances & Components.
New
Orders %
Better %
Same %
Worse
Net
Index
Mar 2014 35 52 13 +22 55.1
Feb 2014 35 49 16 +19 54.5
Jan 2014 27 54 19 +8 51.2
Dec 2013 34 52 14 +20 64.4

Production
ISM®’s Production Index registered 55.9 percent in March, which is an increase of 7.7 percentage points when compared to the 48.2 percent reported in February. This represents the largest month-over-month increase in production since June 2009 when the increase was 12.7 percentage points. It also indicates a return to growth in production following only one month of contraction in the last 19 months. An index above 51.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The 11 industries reporting growth in production during the month of March — listed in order — are: Paper Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Transportation Equipment; Furniture & Related Products; Machinery; Chemical Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The four industries reporting a decrease in production in March are: Apparel, Leather & Allied Products; Wood Products; Electrical Equipment, Appliances & Components; and Textile Mills.

Production %
Better %
Same %
Worse
Net
Index
Mar 2014 31 60 9 +22 55.9
Feb 2014 27 54 19 +8 48.2
Jan 2014 24 60 16 +8 54.8
Dec 2013 28 56 16 +12 61.7

Employment
ISM®’s Employment Index registered 51.1 percent in March, which is a decrease of 1.2 percentage points when compared February’s reading of 52.3 percentage points, and represents the ninth consecutive month of growth in employment. 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 the 18 manufacturing industries, 10 reported growth in employment in March in the following order: Printing & Related Support Activities; Furniture & Related Products; Petroleum & Coal Products; Paper Products; Transportation Equipment; Machinery; Chemical Products; Fabricated Metal Products; Computer & Electronic Products; and Miscellaneous Manufacturing. The five industries reporting a decrease in employment in March are: Apparel, Leather & Allied Products; Textile Mills; Electrical Equipment, Appliances & Components; Primary Metals; and Food, Beverage & Tobacco Products.

Employment %
Higher %
Same %
Lower
Net
Index
Mar 2014 21 64 15 +6 51.1
Feb 2014 20 67 13 +7 52.3
Jan 2014 16 70 14 +2 52.3
Dec 2013 19 68 13 +6 55.8

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in March at a slower rate relative to February as the Supplier Deliveries Index registered 54 percent. This month’s reading is 4.5 percentage points lower than the 58.5 percent reported in February. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The nine industries reporting slower supplier deliveries in March — listed in order — are: Plastics & Rubber Products; Computer & Electronic Products; Nonmetallic Mineral Products; Chemical Products; Food, Beverage & Tobacco Products; Paper Products; Fabricated Metal Products; Machinery; and Transportation Equipment. The three industries reporting faster supplier deliveries in March are: Textile Mills; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing. Six industries reported no change in supplier deliveries in March compared to February.
Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Mar 2014 16 79 5 +11 54.0
Feb 2014 17 82 1 +16 58.5
Jan 2014 15 80 5 +10 54.3
Dec 2013 12 79 9 +3 53.7

Inventories*
The Inventories Index registered 52.5 percent in March, the same reading as reported in February, and indicates that inventories are growing for the second consecutive month, following two consecutive months of contraction. An Inventories Index greater than 42.8 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 12 industries reporting higher inventories in March — listed in order — are: Textile Mills; Printing & Related Support Activities; Petroleum & Coal Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Transportation Equipment; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Computer & Electronic Products; and Electrical Equipment, Appliances & Components. The four industries reporting decreases in inventories in March are: Primary Metals; Miscellaneous Manufacturing; Chemical Products; and Machinery.

Inventories %
Higher %
Same %
Lower
Net
Index
Mar 2014 20 65 15 +5 52.5
Feb 2014 24 57 19 +5 52.5
Jan 2014 14 60 26 -12 44.0
Dec 2013 16 62 22 -6 47.0

Customers’ Inventories*
ISM®’s Customers’ Inventories Index registered 42 percent in March, which is 4.5 percentage points lower than in February when the index registered 46.5 percent. This month’s reading indicates that customers’ inventories are considered too low, and is the lowest reading since May 2011 when the Customers’ Inventories Index registered 39.5 percent. Customers’ inventories have registered at or below 50 percent for 60 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.
The only manufacturing industry reporting customers’ inventories as being too high during the month of March is Food, Beverage & Tobacco Products. The 11 industries reporting customers’ inventories as too low during March — listed in order — are: Plastics & Rubber Products; Textile Mills; Electrical Equipment, Appliances & Components; Furniture & Related Products; Transportation Equipment; Computer & Electronic Products; Fabricated Metal Products; Machinery; Paper Products; Miscellaneous Manufacturing; and Chemical Products. Six industries reported no change in customers’ inventories in March compared to February.
Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Mar 2014 60 8 68 24 -16 42.0
Feb 2014 61 16 61 23 -7 46.5
Jan 2014 66 9 70 21 -12 44.0
Dec 2013 67 16 63 21 -5 47.5

Prices*
The ISM® Prices Index registered 59 percent in March, which is a decrease of 1 percentage point compared to the February reading of 60 percent. In March, 28 percent of respondents reported paying higher prices, 10 percent reported paying lower prices, and 62 percent of supply executives reported paying the same prices as in February. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, 12 reported paying increased prices during the month of March in the following order: Food, Beverage & Tobacco Products; Wood Products; Plastics & Rubber Products; Apparel, Leather & Allied Products; Furniture & Related Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Textile Mills; Chemical Products; Electrical Equipment, Appliances & Components; Paper Products; and Machinery. The four industries reporting paying lower prices during the month of March are: Computer & Electronic Products; Transportation Equipment; Fabricated Metal Products; and Primary Metals.

Prices %
Higher %
Same %
Lower
Net
Index
Mar 2014 28 62 10 +18 59.0
Feb 2014 27 66 7 +20 60.0
Jan 2014 28 65 7 +21 60.5
Dec 2013 20 67 13 +7 53.5

Backlog of Orders*
ISM®’s Backlog of Orders Index registered 57.5 percent in March, which is 5.5 percentage points higher than the 52 percent reported in February, indicating notable growth in order backlogs relative to February. Of the 86 percent of respondents who reported their backlog of orders, 28 percent reported greater backlogs, 13 percent reported smaller backlogs, and 59 percent reported no change from February.
The 14 industries reporting increased order backlogs in March — listed in order — are: Textile Mills; Paper Products; Nonmetallic Mineral Products; Furniture & Related Products; Transportation Equipment; Plastics & Rubber Products; Machinery; Primary Metals; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The only industry reporting a decrease in order backlogs during March is Apparel, Leather & Allied Products.
Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Mar 2014 86 28 59 13 +15 57.5
Feb 2014 85 22 60 18 +4 52.0
Jan 2014 83 19 58 23 -4 48.0
Dec 2013 87 23 57 20 +3 51.5

New Export Orders*
ISM®’s New Export Orders Index registered 55.5 percent in March, which is 2 percentage points higher than the 53.5 percent reported in February. March’s reading reflects growth in the level of exports for the 16th consecutive month.
The 11 industries reporting growth in new export orders in March — listed in order — are: Wood Products; Furniture & Related Products; Transportation Equipment; Textile Mills; Petroleum & Coal Products; Machinery; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Chemical Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The five industries reporting a decrease in new export orders during March are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Primary Metals; and Paper Products.
New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Mar 2014 75 21 69 10 +11 55.5
Feb 2014 76 16 75 9 +7 53.5
Jan 2014 77 17 75 8 +9 54.5
Dec 2013 76 17 76 7 +10 55.0

Imports*
ISM®’s Imports Index registered 54.5 percent in March, which is 1 percentage point higher than the 53.5 percent reported in February. This month’s reading represents 14 consecutive months of growth in imports.
The nine industries reporting growth in imports during the month of March — listed in order — are: Primary Metals; Petroleum & Coal Products; Transportation Equipment; Plastics & Rubber Products; Furniture & Related Products; Machinery; Computer & Electronic Products; Chemical Products; and Food, Beverage & Tobacco Products. The five industries reporting a decrease in imports during March are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; and Fabricated Metal Products.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Mar 2014 78 18 73 9 +9 54.5
Feb 2014 78 17 73 10 +7 53.5
Jan 2014 79 18 71 11 +7 53.5
Dec 2013 79 19 72 9 +10 55.0
* The Inventories, 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 decreased 16 days to 121 days. Average lead time for Production Materials increased by 1 day to 59 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 1 day to 28 days.
Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Mar 2014 28 5 11 18 23 15 121
Feb 2014 23 6 12 15 25 19 137
Jan 2014 23 5 14 17 25 16 129
Dec 2013 31 6 13 15 23 12 109

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Mar 2014 13 39 25 15 6 2 59
Feb 2014 19 34 22 19 3 3 58
Jan 2014 15 38 25 14 5 3 60
Dec 2013 15 35 27 16 4 3 60

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Mar 2014 41 40 14 4 1 0 28
Feb 2014 44 38 13 4 1 0 27
Jan 2014 44 41 11 3 1 0 26
Dec 2013 43 38 13 4 2 0 29

About This Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).
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 (PMI®, New Orders, Production, Employment and Supplier Deliveries) 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 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 PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI® in excess of 43.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.2 percent, it is generally declining. The distance from 50 percent or 43.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.
The Manufacturing ISM® Report On Business® is published monthly by Institute for Supply Management®, the first supply institute in the world. Founded in 1915, ISM®’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. By executing and extending its mission through education, research, standards of excellence and information dissemination — including the renowned monthly ISM® Report On Business® — ISM® maintains a strong global influence among individuals and organizations. ISM® is a not-for-profit educational association that serves professionals with an interest in supply management who live and work in more than 80 countries. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM® Report On Business® is posted on ISM®’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM® Report On Business® featuring the April 2014 data will be released at 10:00 a.m. (ET) on Thursday, May 1, 2014.

February 2014 Manufacturing ISM® Report On Business®PMI® at 53.2%

February 2014 Manufacturing ISM® Report On Business®
PMI® at 53.2%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, 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 February 2014.

New Orders, Employment and Inventories Growing
Production Contracting
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in February for the ninth consecutive month, and the overall economy grew for the 57th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. “The February PMI® registered 53.2 percent, an increase of 1.9 percentage points from January’s reading of 51.3 percent indicating expansion in manufacturing for the ninth consecutive month. The New Orders Index registered 54.5 percent, an increase of 3.3 percentage points from January’s reading of 51.2 percent. The Production Index registered 48.2 percent, a decrease of 6.6 percentage points compared to January’s reading of 54.8 percent. Inventories of raw materials increased by 8.5 percentage points to 52.5 percent. As in January, several comments from the panel mention adverse weather conditions as a factor impacting their businesses in February. Other comments reflect optimism in terms of demand and growth in the near term.”
Of the 18 manufacturing industries, 14 are reporting growth in February in the following order: Textile Mills; Wood Products; Machinery; Printing & Related Support Activities; Plastics & Rubber Products; Nonmetallic Mineral Products; Transportation Equipment; Paper Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Furniture & Related Products; Primary Metals; and Chemical Products. The three industries reporting contraction in February are: Apparel, Leather & Allied Products; Petroleum & Coal Products; and Miscellaneous Manufacturing.
WHAT RESPONDENTS ARE SAYING …
 “Cold weather is having a negative impact on our business (garment). Orders are down.” (Apparel, Leather & Allied Products)
 “Continue to have trouble finding qualified CNC machinists. Desperately trying to hire CNC programmers.” (Fabricated Metal Products)
 “Bad weather hampering logistics across the country.” (Petroleum & Coal Products)
 “Higher than normal demand for this time of year.” (Transportation Equipment)
 “Very strong month in terms of growth.” (Computer & Electronic Products)
 “Many raw material disruptions due to weather and back-ups at the ports.” (Chemical Products)
 “We are seeing competition heat-up this year.” (Plastics & Rubber Products)
 “Slow January, but February orders are picking-up.” (Food, Beverage & Tobacco Products)
 “Conservative optimism re-kindling. Steady as it goes.” (Machinery)
 “Business continues to be stronger. Was at the KBIS/IBS show last week, and the feeling was much the same. Good last year and this year shows great promise.” (Furniture & Related Products)
MANUFACTURING AT A GLANCE
FEBRUARY 2014

Index Series
Index
Feb Series
Index
Jan Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI® 53.2 51.3 +1.9 Growing Faster 9
New Orders 54.5 51.2 +3.3 Growing Faster 9
Production 48.2 54.8 -6.6 Contracting From Growing 1
Employment 52.3 52.3 0.0 Growing Same 8
Supplier Deliveries 58.5 54.3 +4.2 Slowing Faster 9
Inventories 52.5 44.0 +8.5 Growing From Contracting 1
Customers’ Inventories 46.5 44.0 +2.5 Too Low Slower 27
Prices 60.0 60.5 -0.5 Increasing Slower 7
Backlog of Orders 52.0 48.0 +4.0 Growing From Contracting 1
Exports 53.5 54.5 -1.0 Growing Slower 15
Imports 53.5 53.5 0.0 Growing Same 13

OVERALL ECONOMY Growing Faster 57
Manufacturing Sector Growing Faster 9
Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum; Aluminum Extrusions; Electrical Components (2); HDPE; Dairy; Natural Gas (2); Packaging; Pallets; Plastic Resins (3); Polypropylene Resins (2); Sulfuric Acid; Steel (3); Steel — Hot Rolled (4); Wire; and Wood (4).
Commodities Down in Price
No commodities are reported down in price.
Commodities in Short Supply
No commodities are reported in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.

________________________________________
FEBRUARY 2014 MANUFACTURING INDEX SUMMARIES
________________________________________
PMI®
Manufacturing expanded in February as the PMI® registered 53.2 percent, an increase of 1.9 percentage points when compared to January’s reading of 51.3 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI® in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the February PMI® indicates growth for the 57th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the ninth consecutive month. Holcomb stated, “The past relationship between the PMI® and the overall economy indicates that the PMI® for January and February (52.3 percent) corresponds to a 3 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI® for February (53.2 percent) is annualized, it corresponds to a 3.3 percent increase in real GDP annually.”
THE LAST 12 MONTHS
Month PMI® Month PMI®
Feb 2014 53.2 Aug 2013 56.3
Jan 2014 51.3 Jul 2013 54.9
Dec 2013 56.5 Jun 2013 52.5
Nov 2013 57.0 May 2013 50.0
Oct 2013 56.6 Apr 2013 50.0
Sep 2013 56.0 Mar 2013 51.5
Average for 12 months – 53.8
High – 57.0
Low – 50.0

New Orders
ISM®’s New Orders Index registered 54.5 percent in February, an increase of 3.3 percentage points when compared to the January reading of 51.2 percent. This represents growth in new orders for the ninth consecutive month. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The 11 industries reporting growth in new orders in February — listed in order — are: Wood Products; Paper Products; Textile Mills; Printing & Related Support Activities; Machinery; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage & Tobacco Products; Transportation Equipment; Chemical Products; and Primary Metals. The six industries reporting a decrease in new orders during February — listed in order — are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Furniture & Related Products; Miscellaneous Manufacturing; Computer & Electronic Products; and Nonmetallic Mineral Products.
New
Orders %
Better %
Same %
Worse
Net
Index
Feb 2014 35 49 16 +19 54.5
Jan 2014 27 54 19 +8 51.2
Dec 2013 34 52 14 +20 64.4
Nov 2013 36 46 18 +18 63.4

Production
ISM®’s Production Index registered 48.2 percent in February, which is a decrease of 6.6 percentage points when compared to the 54.8 percent reported in January, and is the lowest production reading since May 2009 when the index registered 42.7 percent. It also indicates contraction in production following 17 consecutive months of growth. An index above 51.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The seven industries reporting growth in production during the month of February — listed in order — are: Nonmetallic Mineral Products; Textile Mills; Transportation Equipment; Machinery; Plastics & Rubber Products; Food, Beverage & Tobacco Products; and Fabricated Metal Products. The six industries reporting a decrease in production in February — listed in order — are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Paper Products; Miscellaneous Manufacturing; and Computer & Electronic Products.

Production %
Better %
Same %
Worse
Net
Index
Feb 2014 27 54 19 +8 48.2
Jan 2014 24 60 16 +8 54.8
Dec 2013 28 56 16 +12 61.7
Nov 2013 32 55 13 +19 62.4

Employment
ISM®’s Employment Index registered 52.3 percent in February, which is the same percentage that was reported in January, and represents the eighth consecutive month of growth in employment. 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 the 18 manufacturing industries, 12 reported growth in employment in February in the following order: Wood Products; Textile Mills; Printing & Related Support Activities; Petroleum & Coal Products; Furniture & Related Products; Machinery; Plastics & Rubber Products; Transportation Equipment; Fabricated Metal Products; Paper Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The three industries reporting a decrease in employment in February are: Miscellaneous Manufacturing; Computer & Electronic Products; and Chemical Products.

Employment %
Higher %
Same %
Lower
Net
Index
Feb 2014 20 67 13 +7 52.3
Jan 2014 16 70 14 +2 52.3
Dec 2013 19 68 13 +6 55.8
Nov 2013 18 70 12 +6 55.4

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in February at a faster rate relative to January as the Supplier Deliveries Index registered 58.5 percent. This month’s reading is 4.2 percentage points higher than the 54.3 percent reported in January. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The nine industries reporting slower supplier deliveries in February — listed in order — are: Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Paper Products; Computer & Electronic Products; Machinery; Transportation Equipment; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Chemical Products. No industries reported faster supplier deliveries in February. Nine industries reported no change in supplier deliveries in February compared to January.
Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Feb 2014 17 82 1 +16 58.5
Jan 2014 15 80 5 +10 54.3
Dec 2013 12 79 9 +3 53.7
Nov 2013 6 89 5 +1 53.3

Inventories*
The Inventories Index registered 52.5 percent in February, which is 8.5 percentage points higher than the 44 percent reported in January, and indicates that inventories are growing, following two consecutive months of contraction. February’s reading reflects the largest month over month inventory increase since April 1988 when the percentage of growth was 9.1 percent over March 1988. An Inventories Index greater than 42.8 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 eight industries reporting higher inventories in February — listed in order — are: Textile Mills; Nonmetallic Mineral Products; Plastics & Rubber Products; Machinery; Furniture & Related Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. The four industries reporting decreases in inventories in February are: Apparel, Leather & Allied Products; Paper Products; Fabricated Metal Products; and Chemical Products. Six industries reported no change in inventories in February compared to January.

Inventories %
Higher %
Same %
Lower
Net
Index
Feb 2014 24 57 19 +5 52.5
Jan 2014 14 60 26 -12 44.0
Dec 2013 16 62 22 -6 47.0
Nov 2013 21 59 20 +1 50.5

Customers’ Inventories*
ISM®’s Customers’ Inventories Index registered 46.5 percent in February, which is 2.5 percentage points higher than in January when the index registered 44 percent. This month’s reading indicates that customers’ inventories are considered too low, but higher than reported in January. Customers’ inventories have registered at or below 50 percent for 59 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.
The five manufacturing industries reporting customers’ inventories as being too high during the month of February are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; and Chemical Products. The eight industries reporting customers’ inventories as too low during February — listed in order — are: Textile Mills; Nonmetallic Mineral Products; Transportation Equipment; Machinery; Fabricated Metal Products; Paper Products; Computer & Electronic Products; and Plastics & Rubber Products.
Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Feb 2014 61 16 61 23 -7 46.5
Jan 2014 66 9 70 21 -12 44.0
Dec 2013 67 16 63 21 -5 47.5
Nov 2013 65 12 66 22 -10 45.0

Prices*
The ISM® Prices Index registered 60 percent in February, which is a slight decrease of 0.5 percentage point compared to the January reading of 60.5 percent. In February, 27 percent of respondents reported paying higher prices, 7 percent reported paying lower prices, and 66 percent of supply executives reported paying the same prices as in January. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, 13 reported paying increased prices during the month of February in the following order: Wood Products; Textile Mills; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Chemical Products; Furniture & Related Products; Machinery; Paper Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Miscellaneous Manufacturing; Transportation Equipment; and Computer & Electronic Products. No industry reported paying lower prices during the month of February.

Prices %
Higher %
Same %
Lower
Net
Index
Feb 2014 27 66 7 +20 60.0
Jan 2014 28 65 7 +21 60.5
Dec 2013 20 67 13 +7 53.5
Nov 2013 18 69 13 +5 52.5

Backlog of Orders*
ISM®’s Backlog of Orders Index registered 52 percent in February, which is 4 percentage points higher than the 48 percent reported in January, indicating growth in order backlogs following one month of contraction in the last five months. Of the 85 percent of respondents who reported their backlog of orders, 22 percent reported greater backlogs, 18 percent reported smaller backlogs, and 60 percent reported no change from January.
The eight industries reporting increased order backlogs in February — listed in order — are: Wood Products; Primary Metals; Electrical Equipment, Appliances & Components; Chemical Products; Paper Products; Fabricated Metal Products; Machinery; and Computer & Electronic Products. The seven industries reporting decreases in order backlogs during February — listed in order — are: Nonmetallic Mineral Products; Petroleum & Coal Products; Apparel, Leather & Allied Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Transportation Equipment; and Food, Beverage & Tobacco Products.
Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Feb 2014 85 22 60 18 +4 52.0
Jan 2014 83 19 58 23 -4 48.0
Dec 2013 87 23 57 20 +3 51.5
Nov 2013 85 24 60 16 +8 54.0

New Export Orders*
ISM®’s New Export Orders Index registered 53.5 percent in February, which is 1 percentage point lower than the 54.5 percent reported in January. February’s reading reflects growth in the level of exports for the 15th consecutive month.
The eight industries reporting growth in new export orders in February — listed in order — are: Textile Mills; Electrical Equipment, Appliances & Components; Chemical Products; Transportation Equipment; Paper Products; Machinery; Food, Beverage & Tobacco Products; and Fabricated Metal Products. The six industries reporting a decrease in new export orders during February — listed in order — are: Wood Products; Primary Metals; Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; and Computer & Electronic Products.
New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Feb 2014 76 16 75 9 +7 53.5
Jan 2014 77 17 75 8 +9 54.5
Dec 2013 76 17 76 7 +10 55.0
Nov 2013 75 22 75 3 +19 59.5

Imports*
ISM®’s Imports Index registered 53.5 percent in February, which is the same percentage that was reported in January. This month’s reading represents 13 consecutive months of growth in imports.
The six industries reporting growth in imports during the month of February — listed in order — are: Primary Metals; Food, Beverage & Tobacco Products; Machinery; Transportation Equipment; Computer & Electronic Products; and Chemical Products. The five industries reporting a decrease in imports during February are: Nonmetallic Mineral Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; and Fabricated Metal Products. Six industries reported no change in imports in February compared to January.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Feb 2014 78 17 73 10 +7 53.5
Jan 2014 79 18 71 11 +7 53.5
Dec 2013 79 19 72 9 +10 55.0
Nov 2013 78 19 72 9 +10 55.0
* The Inventories, 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 increased 8 days to 137 days. Average lead time for Production Materials decreased by 2 days to 58 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 1 day to 27 days.
Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Feb 2014 23 6 12 15 25 19 137
Jan 2014 23 5 14 17 25 16 129
Dec 2013 31 6 13 15 23 12 109
Nov 2013 25 7 13 17 23 15 122

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Feb 2014 19 34 22 19 3 3 58
Jan 2014 15 38 25 14 5 3 60
Dec 2013 15 35 27 16 4 3 60
Nov 2013 17 37 30 10 4 2 53

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Feb 2014 44 38 13 4 1 0 27
Jan 2014 44 41 11 3 1 0 26
Dec 2013 43 38 13 4 2 0 29
Nov 2013 45 37 13 4 1 0 27

About This Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).
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 (PMI®, New Orders, Production, Employment and Supplier Deliveries) 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 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 PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI® in excess of 43.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.2 percent, it is generally declining. The distance from 50 percent or 43.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.
The Manufacturing ISM® Report On Business® is published monthly by Institute for Supply Management®, the first supply institute in the world. Founded in 1915, ISM®’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. By executing and extending its mission through education, research, standards of excellence and information dissemination — including the renowned monthly ISM® Report On Business® — ISM® maintains a strong global influence among individuals and organizations. ISM® is a not-for-profit educational association that serves professionals with an interest in supply management who live and work in more than 80 countries. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM® Report On Business® is posted on ISM®’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM® Report On Business® featuring the March 2014 data will be released at 10:00 a.m. (ET) on Tuesday, April 1, 2014.

January 2014 Manufacturing ISM Report On Business® PMI® at 51.3%

January 2014 Manufacturing ISM Report On Business®
PMI® at 51.3%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, 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 January 2014.
This report reflects ISM’s recently completed annual adjustment to the seasonal factors used to calculate the applicable indexes, as noted.

New Orders, Production and Employment Growing
Inventories Contracting
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in January for the eighth consecutive month, and the overall economy grew for the 56th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The January PMI® registered 51.3 percent, a decrease of 5.2 percentage points from December’s seasonally adjusted reading of 56.5 percent. The New Orders Index registered 51.2 percent, a significant decrease of 13.2 percentage points from December’s seasonally adjusted reading of 64.4 percent. The Production Index registered 54.8 percent, a decrease of 6.9 percentage points compared to December’s seasonally adjusted reading of 61.7 percent. Inventories of raw materials decreased by 3 percentage points to 44 percent, its lowest reading since December 2012 when the Inventories Index registered 43 percent. A number of comments from the panel cite adverse weather conditions as a factor negatively impacting their businesses in January, while others reflect optimism and increasing volumes in the early stages of 2014.”
Of the 18 manufacturing industries, 11 are reporting growth in January in the following order: Plastics & Rubber Products; Primary Metals; Textile Mills; Wood Products; Printing & Related Support Activities; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Furniture & Related Products; and Food, Beverage & Tobacco Products. The seven industries reporting contraction in January — listed in order — are: Nonmetallic Mineral Products; Petroleum & Coal Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Chemical Products; Paper Products; and Computer & Electronic Products.
WHAT RESPONDENTS ARE SAYING …
 “We are seeing slight improvements, year-over-year, month-to-month, across most regions and business segments.” (Apparel, Leather & Allied Products)
 “Poor weather impacted outbound and inbound shipments.” (Fabricated Metal Products)
 “Good finish to 2013, but slow start to 2014, mostly attributed to weather.” (Petroleum & Coal Products)
 “U.S. government aerospace business is very brisk.” (Transportation Equipment)
 “Slight improvements in defense business. But still lagging from previous years.” (Computer & Electronic Products)
 “Cautiously optimistic about increasing volumes but still challenging, and margins remain low.” (Chemical Products)
 “We have experienced many late deliveries during the past week due to the weather shutting down truck lines.” (Plastics & Rubber Products)
 “We continue to be busy, working six days, 24 hours a day.” (Primary Metals)
 “Restricted optimism heading into Q1.” (Machinery)
 “Delays in government product certification due to the partial government shutdown last year are still negatively impacting delivery and inventory levels.” (Miscellaneous Manufacturing)
MANUFACTURING AT A GLANCE
JANUARY 2014

Index Series
Index
Jan Series
Index
Dec Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI® 51.3 56.5 -5.2 Growing Slower 8
New Orders 51.2 64.4 -13.2 Growing Slower 8
Production 54.8 61.7 -6.9 Growing Slower 17
Employment 52.3 55.8 -3.5 Growing Slower 7
Supplier Deliveries 54.3 53.7 +0.6 Slowing Faster 8
Inventories 44.0 47.0 -3.0 Contracting Faster 2
Customers’ Inventories 44.0 47.5 -3.5 Too Low Faster 26
Prices 60.5 53.5 +7.0 Increasing Faster 6
Backlog of Orders 48.0 51.5 -3.5 Contracting From Growing 1
Exports 54.5 55.0 -0.5 Growing Slower 14
Imports 53.5 55.0 -1.5 Growing Slower 12

OVERALL ECONOMY Growing Slower 56
Manufacturing Sector Growing Slower 8
Manufacturing ISM Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.
*Number of months moving in current direction.
Indexes reflect newly released seasonal adjustment factors.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Copper; Electrical Components; Natural Gas; Plastic Resins (2); Polypropylene Resins; Stainless Steel (2); Steel (2); Steel — Hot Rolled (3); and Wood (3).
Commodities Down in Price
Caustic Soda is the only commodity reported in short supply.
Commodities in Short Supply
No commodities are reported in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.

________________________________________
JANUARY 2014 MANUFACTURING INDEX SUMMARIES
________________________________________
PMI®
Manufacturing expanded in January as the PMI® registered 51.3 percent, a decrease of 5.2 percentage points when compared to December’s seasonally adjusted reading of 56.5 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI® in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the January PMI® indicates growth for the 56th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the eighth consecutive month. Holcomb stated, “The past relationship between the PMI® and the overall economy indicates that the PMI® for January (51.3 percent) corresponds to a 2.7 percent increase in real gross domestic product (GDP) on an annualized basis.”
THE LAST 12 MONTHS
Month PMI® Month PMI®
Jan 2014 51.3 Jul 2013 54.9
Dec 2013 56.5 Jun 2013 52.5
Nov 2013 57.0 May 2013 50.0
Oct 2013 56.6 Apr 2013 50.0
Sep 2013 56.0 Mar 2013 51.5
Aug 2013 56.3 Feb 2013 53.1
Average for 12 months – 53.8
High – 57.0
Low – 50.0

New Orders
ISM’s New Orders Index registered 51.2 percent in January, a significant decrease of 13.2 percentage points when compared to the December seasonally adjusted reading of 64.4 percent. This represents growth in new orders for the eighth consecutive month, but is also the largest decline in new orders in the last four years. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The eight industries reporting growth in new orders in January — listed in order — are: Primary Metals; Electrical Equipment, Appliances & Components; Machinery; Transportation Equipment; Plastics & Rubber Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Chemical Products. The seven industries reporting a decrease in new orders during January — listed in order — are: Nonmetallic Mineral Products; Petroleum & Coal Products; Wood Products; Miscellaneous Manufacturing; Furniture & Related Products; Paper Products; and Fabricated Metal Products.
New
Orders %
Better %
Same %
Worse
Net
Index
Jan 2014 27 54 19 +8 51.2
Dec 2013 34 52 14 +20 64.4
Nov 2013 36 46 18 +18 63.4
Oct 2013 29 54 17 +12 61.3

Production
ISM’s Production Index registered 54.8 percent in January, which is a decrease of 6.9 percentage points when compared to the seasonally adjusted 61.7 percent reported in December. This month’s reading indicates growth in production for the 17th consecutive month, but at a significantly slower rate than in December. An index above 51.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The nine industries reporting growth in production during the month of January — listed in order — are: Apparel, Leather & Allied Products; Machinery; Plastics & Rubber Products; Primary Metals; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Paper Products. The four industries reporting a decrease in production in January are: Nonmetallic Mineral Products; Petroleum & Coal Products; Chemical Products; and Computer & Electronic Products.

Production %
Better %
Same %
Worse
Net
Index
Jan 2014 24 60 16 +8 54.8
Dec 2013 28 56 16 +12 61.7
Nov 2013 32 55 13 +19 62.4
Oct 2013 30 54 16 +14 60.8

Employment
ISM’s Employment Index registered 52.3 percent in January, which is 3.5 percentage points lower than the seasonally adjusted 55.8 percent reported in December, and represents the seventh consecutive month of growth in employment, but at a slower rate than in December. 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 the 18 manufacturing industries, 10 reported growth in employment in January in the following order: Textile Mills; Wood Products; Printing & Related Support Activities; Petroleum & Coal Products; Primary Metals; Furniture & Related Products; Machinery; Transportation Equipment; Fabricated Metal Products; and Food, Beverage & Tobacco Products. The six industries reporting a decrease in employment in January — listed in order — are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Chemical Products; Paper Products; and Miscellaneous Manufacturing.

Employment %
Higher %
Same %
Lower
Net
Index
Jan 2014 16 70 14 +2 52.3
Dec 2013 19 68 13 +6 55.8
Nov 2013 18 70 12 +6 55.4
Oct 2013 21 63 16 +5 54.3

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in January at a faster rate relative to December as the Supplier Deliveries Index registered 54.3 percent. This month’s reading is 0.6 percentage point higher than the seasonally adjusted 53.7 percent reported in December. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The 10 industries reporting slower supplier deliveries in January — listed in order — are: Plastics & Rubber Products; Computer & Electronic Products; Paper Products; Primary Metals; Furniture & Related Products; Fabricated Metal Products; Machinery; Chemical Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. No industries reported faster supplier deliveries in January. Eight industries reported no change in supplier deliveries in January compared to December.
Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Jan 2014 15 80 5 +10 54.3
Dec 2013 12 79 9 +3 53.7
Nov 2013 6 89 5 +1 53.3
Oct 2013 11 83 6 +5 54.1

Inventories*
The Inventories Index registered 44 percent in January, which is 3 percentage points lower than the 47 percent reported in December. This month’s reading indicates that respondents are reporting inventories are contracting for the second consecutive month, following two consecutive months of growth in raw materials inventories. An Inventories Index greater than 42.8 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 five industries reporting higher inventories in January are: Wood Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; and Fabricated Metal Products. The 10 industries reporting decreases in inventories in January — listed in order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Petroleum & Coal Products; Machinery; Paper Products; Computer & Electronic Products; Chemical Products; Miscellaneous Manufacturing; Transportation Equipment; and Food, Beverage & Tobacco Products.

Inventories %
Higher %
Same %
Lower
Net
Index
Jan 2014 14 60 26 -12 44.0
Dec 2013 16 62 22 -6 47.0
Nov 2013 21 59 20 +1 50.5
Oct 2013 25 55 20 +5 52.5

Customers’ Inventories*
The ISM Customers’ Inventories Index registered 44 percent in January, which is 3.5 percentage points lower than in December when the index registered 47.5 percent. This month’s reading indicates that customers’ inventories are considered too low, and lower than reported in December. Customers’ inventories have registered at or below 50 percent for 58 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.
The two manufacturing industries reporting customers’ inventories as being too high during the month of January are: Fabricated Metal Products; and Chemical Products. The seven industries reporting customers’ inventories as too low during January — listed in order — are: Wood Products; Primary Metals; Computer & Electronic Products; Paper Products; Machinery; Electrical Equipment, Appliances & Components; and Transportation Equipment. Seven industries reported no change in customers’ inventories in January compared to December.
Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Jan 2014 66 9 70 21 -12 44.0
Dec 2013 67 16 63 21 -5 47.5
Nov 2013 65 12 66 22 -10 45.0
Oct 2013 60 12 70 18 -6 47.0

Prices*
The ISM Prices Index registered 60.5 percent in January, which is an increase of 7 percentage points compared to the December reading of 53.5 percent. This month’s reading indicates an increase in raw materials prices for the sixth consecutive month. In January, 28 percent of respondents reported paying higher prices, 7 percent reported paying lower prices, and 65 percent of supply executives reported paying the same prices as in December. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, 12 reported paying increased prices during the month of January in the following order: Wood Products; Printing & Related Support Activities; Petroleum & Coal Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Machinery; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; Miscellaneous Manufacturing; Chemical Products; and Food, Beverage & Tobacco Products. The only industry reporting paying lower prices during January is Paper Products.

Prices %
Higher %
Same %
Lower
Net
Index
Jan 2014 28 65 7 +21 60.5
Dec 2013 20 67 13 +7 53.5
Nov 2013 18 69 13 +5 52.5
Oct 2013 22 67 11 +11 55.5

Backlog of Orders*
ISM’s Backlog of Orders Index registered 48 percent in January, which is 3.5 percentage points lower than the 51.5 percent reported in December, indicating a contraction of order backlogs following three consecutive months of expanding order backlogs. Of the 83 percent of respondents who reported their backlog of orders, 19 percent reported greater backlogs, 23 percent reported smaller backlogs, and 58 percent reported no change from December.
The three industries reporting increased order backlogs in January are: Primary Metals; Machinery; and Fabricated Metal Products. The 10 industries reporting decreases in order backlogs during January — listed in order — are: Nonmetallic Mineral Products; Petroleum & Coal Products; Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; and Transportation Equipment.
Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Jan 2014 83 19 58 23 -4 48.0
Dec 2013 87 23 57 20 +3 51.5
Nov 2013 85 24 60 16 +8 54.0
Oct 2013 86 24 55 21 +3 51.5

New Export Orders*
ISM’s New Export Orders Index registered 54.5 percent in January, which is 0.5 percentage point lower than the 55 percent reported in December. January’s reading reflects growth in the level of exports for the 14th consecutive month.
The eight industries reporting growth in new export orders in January — listed in order — are: Apparel, Leather & Allied Products; Transportation Equipment; Food, Beverage & Tobacco Products; Computer & Electronic Products; Fabricated Metal Products; Chemical Products; Machinery; and Miscellaneous Manufacturing. The two industries reporting a decrease in new export orders during January are: Plastics & Rubber Products; and Paper Products. Eight industries reported no change in new export orders in January compared to December.
New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Jan 2014 77 17 75 8 +9 54.5
Dec 2013 76 17 76 7 +10 55.0
Nov 2013 75 22 75 3 +19 59.5
Oct 2013 78 19 76 5 +14 57.0

Imports*
ISM’s Imports Index registered 53.5 percent in January, which is 1.5 percentage points lower than the 55 percent reported in December. This month’s reading represents the 14th consecutive month that the Imports Index has registered at or above 50 percent.
The nine industries reporting growth in imports during the month of January — listed in order — are: Textile Mills; Computer & Electronic Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Machinery; Furniture & Related Products; and Miscellaneous Manufacturing. The four industries reporting a decrease in imports during January are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; and Chemical Products.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Jan 2014 79 18 71 11 +7 53.5
Dec 2013 79 19 72 9 +10 55.0
Nov 2013 78 19 72 9 +10 55.0
Oct 2013 77 18 75 7 +11 55.5
*The Inventories, 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 increased 20 days to 129 days. Average lead time for Production Materials remained the same at 60 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies decreased 3 days to 26 days.
Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jan 2014 23 5 14 17 25 16 129
Dec 2013 31 6 13 15 23 12 109
Nov 2013 25 7 13 17 23 15 122
Oct 2013 25 7 13 14 25 16 126

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jan 2014 15 38 25 14 5 3 60
Dec 2013 15 35 27 16 4 3 60
Nov 2013 17 37 30 10 4 2 53
Oct 2013 15 36 25 16 4 4 63

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jan 2014 44 41 11 3 1 0 26
Dec 2013 43 38 13 4 2 0 29
Nov 2013 45 37 13 4 1 0 27
Oct 2013 41 41 11 4 2 1 32

About This Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).
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 (PMI®, New Orders, Production, Employment and Supplier Deliveries) 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 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 PMI® reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI® in excess of 43.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.2 percent, it is generally declining. The distance from 50 percent or 43.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.
The Manufacturing ISM Report On Business® is published monthly by Institute for Supply Management™, the first supply institute in the world. Founded in 1915, ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. By executing and extending its mission through education, research, standards of excellence and information dissemination — including the renowned monthly ISM Report On Business® — ISM maintains a strong global influence among individuals and organizations. ISM is a not-for-profit educational association that serves professionals with an interest in supply management who live and work in more than 80 countries. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM Report On Business® is posted on ISM’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM Report On Business® featuring the February 2014 data will be released at 10:00 a.m. (ET) on Monday, March 3, 2014.

December 2013 Manufacturing ISM Report On Business® PMI™ at 57%

New Orders, Production and Employment Growing
Inventories Contracting
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in December for the seventh consecutive month, and theoverall economy grew for the 55th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI™ registered 57 percent, the second highest reading for the year, just 0.3 percentage point below November’s reading of 57.3 percent. The New Orders Index increased in December by 0.6 percentage point to 64.2 percent, which is its highest reading since April 2010 when it registered 65.1 percent. The Employment Index registered 56.9 percent, an increase of 0.4 percentage point compared to November’s reading of 56.5 percent. December’s employment reading is the highest since June 2011 when the Employment Index registered 59 percent. Comments from the panel generally reflect a solid final month of the year, capping off the second half of 2013, which was characterized by continuous growth and momentum in manufacturing.”
Of the 18 manufacturing industries, 13 are reporting growth in December in the following order: Furniture & Related Products; Plastics & Rubber Products; Textile Mills; Apparel, Leather & Allied Products; Computer & Electronic Products; Paper Products; Transportation Equipment; Primary Metals; Fabricated Metal Products; Wood Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing. The four industries reporting contraction in December are: Nonmetallic Mineral Products; Machinery; Chemical Products; and Electrical Equipment, Appliances & Components.
WHAT RESPONDENTS ARE SAYING …
 “Amazingly enough, we are seeing meaningful increases in our sales in nearly all segments and regions.” (Apparel, Leather & Allied Products)
 “Largest backlog ever. Most orders waiting on customer approvals.” (Fabricated Metal Products)
 “Orders and price continue to be strong.” (Paper Products)
 “Continued government spending constraints keeping production volumes low.” (Transportation Equipment)
 “Good overall business conditions nationally and internationally.” (Computer & Electronic Products)
 “Markets are sound. We typically see a seasonal 4th quarter slowdown. However, this year … not so.” (Wood Products)
 “Very, very busy.” (Furniture & Related Products)
 “Sales are strong going into the holiday season.” (Food, Beverage & Tobacco Products)
 “Construction equipment market continues to be flat with some signs of improvement on the horizon.” (Machinery)
 “Business conditions remain stable to slightly improving.” (Miscellaneous Manufacturing)
MANUFACTURING AT A GLANCE
DECEMBER 2013

Index Series
Index
Dec Series
Index
Nov Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI™ 57.0 57.3 -0.3 Growing Slower 7
New Orders 64.2 63.6 +0.6 Growing Faster 7
Production 62.2 62.8 -0.6 Growing Slower 7
Employment 56.9 56.5 +0.4 Growing Faster 6
Supplier Deliveries 54.7 53.2 +1.5 Slowing Faster 6
Inventories 47.0 50.5 -3.5 Contracting From Growing 1
Customers’ Inventories 47.5 45.0 +2.5 Too Low Slower 25
Prices 53.5 52.5 +1.0 Increasing Faster 5
Backlog of Orders 51.5 54.0 -2.5 Growing Slower 3
Exports 55.0 59.5 -4.5 Growing Slower 13
Imports 55.0 55.0 0.0 Growing Same 11

OVERALL ECONOMY Growing Slower 55
Manufacturing Sector Growing Slower 7
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
#1 Busheling Scrap; Corrugated Packaging; Galvanized Steel; Methanol; Plastic Resins; Stainless Steel; Steel; Steel — HRPO; Steel — Hot Rolled (2); and Wood (2).
Commodities Down in Price
Aluminum (2); Brass; Corn Based Products (2); Fuel (2); Hydraulic Components; MRO Supplies; and Office Supplies.
Commodities in Short Supply
No commodities are reported in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.

________________________________________
DECEMBER 2013 MANUFACTURING INDEX SUMMARIES
________________________________________
PMI™
Manufacturing expanded in December as the PMI™ registered 57 percent, a decrease of 0.3 percentage point when compared to November’s reading of 57.3 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the December PMI™ indicates growth for the 55th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the seventh consecutive month. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through December (53.9 percent) corresponds to a 3.7 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for December (57 percent) is annualized, it corresponds to a 4.6 percent increase in real GDP annually.”
THE LAST 12 MONTHS
Month PMI™ Month PMI™
Dec 2013 57.0 Jun 2013 50.9
Nov 2013 57.3 May 2013 49.0
Oct 2013 56.4 Apr 2013 50.7
Sep 2013 56.2 Mar 2013 51.3
Aug 2013 55.7 Feb 2013 54.2
Jul 2013 55.4 Jan 2013 53.1
Average for 12 months – 53.9
High – 57.3
Low – 49.0

New Orders
ISM’s New Orders Index registered 64.2 percent in December, an increase of 0.6 percentage point when compared to the November reading of 63.6 percent. This represents growth in new orders for the seventh consecutive month, at a faster rate than in November. A New Orders Index above 52.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The 11 industries reporting growth in new orders in December — listed in order — are: Apparel, Leather & Allied Products; Plastics & Rubber Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Furniture & Related Products; Computer & Electronic Products; Primary Metals; Machinery; Transportation Equipment; Miscellaneous Manufacturing; and Chemical Products. The only industry reporting a decrease in new orders during December is Nonmetallic Mineral Products. Six industries reported no change in new orders in December compared to November.
New
Orders %
Better %
Same %
Worse
Net
Index
Dec 2013 34 52 14 +20 64.2
Nov 2013 36 46 18 +18 63.6
Oct 2013 29 54 17 +12 60.6
Sep 2013 32 53 15 +17 60.5

Production
ISM’s Production Index registered 62.2 percent in December, which is a decrease of 0.6 percentage point when compared to the 62.8 percent reported in November. This month’s reading indicates growth in production for the seventh consecutive month, at a slightly slower rate than in November. An index above 51.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The nine industries reporting growth in production during the month of December — listed in order — are: Plastics & Rubber Products; Furniture & Related Products; Computer & Electronic Products; Paper Products; Primary Metals; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Transportation Equipment. The four industries reporting a decrease in production in December are: Electrical Equipment, Appliances & Components; Chemical Products; Machinery; and Nonmetallic Mineral Products.

Production %
Better %
Same %
Worse
Net
Index
Dec 2013 28 56 16 +12 62.2
Nov 2013 32 55 13 +19 62.8
Oct 2013 30 54 16 +14 60.8
Sep 2013 29 57 14 +15 62.6

Employment
ISM’s Employment Index registered 56.9 percent in December, which is 0.4 percentage point higher than the 56.5 percent reported in November, and is the highest reading since June 2011 when the Employment Index registered 59 percent. This month’s reading indicates expansion in employment for the sixth consecutive month, at a slightly faster rate than in November. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, nine reported growth in employment in December in the following order: Textile Mills; Furniture & Related Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Primary Metals; Paper Products; Transportation Equipment; Computer & Electronic Products; and Fabricated Metal Products. The five industries reporting a decrease in employment in December are: Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Chemical Products; Machinery; and Nonmetallic Mineral Products.

Employment %
Higher %
Same %
Lower
Net
Index
Dec 2013 19 68 13 +6 56.9
Nov 2013 18 70 12 +6 56.5
Oct 2013 21 63 16 +5 53.2
Sep 2013 20 66 14 +6 55.4

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in December at a faster rate relative to November as the Supplier Deliveries Index registered 54.7 percent. This month’s reading is 1.5 percentage points higher than the 53.2 percent reported in November. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The six industries reporting slower supplier deliveries in December — listed in order — are: Plastics & Rubber Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Paper Products; Computer & Electronic Products; and Transportation Equipment. The three industries reporting faster supplier deliveries in December are: Primary Metals; Machinery; and Chemical Products. Nine industries reported no change in supplier deliveries in December compared to November.
Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Dec 2013 12 79 9 +3 54.7
Nov 2013 6 89 5 +1 53.2
Oct 2013 11 83 6 +5 54.7
Sep 2013 10 86 4 +6 52.6

Inventories*
The Inventories Index registered 47 percent in December, which is 3.5 percentage points lower than the 50.5 percent reported in November. This month’s reading indicates that respondents are reporting inventories are contracting, following two consecutive months of growth in raw materials inventories. An Inventories Index greater than 42.7 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 eight industries reporting higher inventories in December — listed in order — are: Wood Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Furniture & Related Products; Paper Products; Computer & Electronic Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. The six industries reporting decreases in inventories in December — listed in order — are: Apparel, Leather & Allied Products; Machinery; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; and Chemical Products.

Inventories %
Higher %
Same %
Lower
Net
Index
Dec 2013 16 62 22 -6 47.0
Nov 2013 21 59 20 +1 50.5
Oct 2013 25 55 20 +5 52.5
Sep 2013 19 62 19 0 50.0

Customers’ Inventories*
The ISM Customers’ Inventories Index registered 47.5 percent in December, which is 2.5 percentage points higher than in November when the index registered 45 percent. This month’s reading indicates that customers’ inventories are considered too low, but higher than reported in November. Customers’ inventories have registered at or below 50 percent for 57 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.
The five manufacturing industries reporting customers’ inventories as being too high during the month of December are: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; and Fabricated Metal Products. The eight industries reporting customers’ inventories as too low during December — listed in order — are: Plastics & Rubber Products; Primary Metals; Machinery; Computer & Electronic Products; Paper Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; and Transportation Equipment.
Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Dec 2013 67 16 63 21 -5 47.5
Nov 2013 65 12 66 22 -10 45.0
Oct 2013 60 12 70 18 -6 47.0
Sep 2013 71 10 66 24 -14 43.0

Prices*
The ISM Prices Index registered 53.5 percent in December, which is an increase of 1 percentage point compared to the November reading of 52.5 percent. This month’s reading indicates an increase in raw materials prices for the fifth consecutive month. In December, 20 percent of respondents reported paying higher prices, 13 percent reported paying lower prices, and 67 percent of supply executives reported paying the same prices as in November. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, seven reported paying increased prices during the month of December in the following order: Printing & Related Support Activities; Plastics & Rubber Products; Primary Metals; Furniture & Related Products; Fabricated Metal Products; Machinery; and Transportation Equipment. The six industries reporting paying lower prices during December — listed in order — are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; and Computer & Electronic Products.

Prices %
Higher %
Same %
Lower
Net
Index
Dec 2013 20 67 13 +7 53.5
Nov 2013 18 69 13 +5 52.5
Oct 2013 22 67 11 +11 55.5
Sep 2013 22 69 9 +13 56.5

Backlog of Orders*
ISM’s Backlog of Orders Index registered 51.5 percent in December, which is 2.5 percentage points lower than the 54 percent reported in November. This is the third consecutive month of expanding order backlogs. Of the 87 percent of respondents who reported their backlog of orders, 23 percent reported greater backlogs, 20 percent reported smaller backlogs, and 57 percent reported no change from November.
The eight industries reporting increased order backlogs in December — listed in order — are: Primary Metals; Plastics & Rubber Products; Nonmetallic Mineral Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Paper Products; Fabricated Metal Products; and Transportation Equipment. The six industries reporting decreases in order backlogs during December — listed in order — are: Petroleum & Coal Products; Wood Products; Apparel, Leather & Allied Products; Chemical Products; Electrical Equipment, Appliances & Components; and Machinery.
Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Dec 2013 87 23 57 20 +3 51.5
Nov 2013 85 24 60 16 +8 54.0
Oct 2013 86 24 55 21 +3 51.5
Sep 2013 86 19 61 20 -1 49.5

New Export Orders*
ISM’s New Export Orders Index registered 55 percent in December, which is 4.5 percentage points lower than the 59.5 percent reported in November. December’s reading reflects growth in the level of exports for the 13th consecutive month.
The nine industries reporting growth in new export orders in December — listed in order — are: Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Furniture & Related Products; Computer & Electronic Products; Fabricated Metal Products; Transportation Equipment; Miscellaneous Manufacturing; Machinery; and Chemical Products. No industries reported a decrease in new export orders during December. Eight industries reported no change in new export orders in December compared to November.
New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Dec 2013 76 17 76 7 +10 55.0
Nov 2013 75 22 75 3 +19 59.5
Oct 2013 78 19 76 5 +14 57.0
Sep 2013 76 14 76 10 +4 52.0

Imports*
ISM’s Imports Index registered 55 percent in December, which is the same percentage that was reported in November. This month’s reading represents the 13th consecutive month that the Imports Index has registered at or above 50 percent.
The eight industries reporting growth in imports during the month of December — listed in order — are: Textile Mills; Nonmetallic Mineral Products; Computer & Electronic Products; Transportation Equipment; Furniture & Related Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; and Chemical Products. The two industries reporting a decrease in imports during December are: Apparel, Leather & Allied Products; and Primary Metals. Eight industries reported no change in import orders in December compared to November.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Dec 2013 79 19 72 9 +10 55.0
Nov 2013 78 19 72 9 +10 55.0
Oct 2013 77 18 75 7 +11 55.5
Sep 2013 77 19 72 9 +10 55.0
* The Inventories, 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 decreased 13 days to 109 days. Average lead time for Production Materials increased 7 days to 60 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 2 days to 29 days.
Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Dec 2013 31 6 13 15 23 12 109
Nov 2013 25 7 13 17 23 15 122
Oct 2013 25 7 13 14 25 16 126
Sep 2013 26 7 14 17 25 11 112

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Dec 2013 15 35 27 16 4 3 60
Nov 2013 17 37 30 10 4 2 53
Oct 2013 15 36 25 16 4 4 63
Sep 2013 17 37 23 16 4 3 58

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Dec 2013 43 38 13 4 2 0 29
Nov 2013 45 37 13 4 1 0 27
Oct 2013 41 41 11 4 2 1 32
Sep 2013 45 40 11 3 1 0 25

About This Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).
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 (PMI™, New Orders, Production, Employment and Supplier Deliveries) 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 supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The 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 PMI™ reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI™ in excess of 42.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.2 percent, it is generally declining. The distance from 50 percent or 42.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.
The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, the first supply institute in the world. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM Report On Business® is posted on ISM’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM Report On Business® featuring the January 2014 data will be released at 10:00 a.m. (ET) on Monday, February 3, 2014.

November 2013 Manufacturing ISM Report On Business®PMI™ at 57.3%

November 2013 Manufacturing ISM Report On Business®PMI™ at 57.3%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, 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 2013.

New Orders, Production and Employment Growing
Inventories Growing
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in November for the sixth consecutive month, and theoverall economy grew for the 54th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI™ registered 57.3 percent, an increase of 0.9 percentage point from October’s reading of 56.4 percent. The PMI™ has increased progressively each month since June, with November’s reading reflecting the highest PMI™ in 2013. The New Orders Index increased in November by 3 percentage points to 63.6 percent, and the Production Index increased by 2 percentage points to 62.8 percent. The Employment Index registered 56.5 percent, an increase of 3.3 percentage points compared to October’s reading of 53.2 percent. This reflects the highest reading since April 2012 when the Employment Index registered 56.8 percent. With 15 of 18 manufacturing industries reporting growth in November relative to October, the positive growth trend characterizing the second half of 2013 is continuing.”
Of the 18 manufacturing industries, 15 are reporting growth in November in the following order: Plastics & Rubber Products; Textile Mills; Furniture & Related Products; Primary Metals; Food, Beverage & Tobacco Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Transportation Equipment; Chemical Products; Computer & Electronic Products; Nonmetallic Mineral Products; and Fabricated Metal Products. The three industries reporting contraction in November are: Apparel, Leather & Allied Products; Wood Products; and Machinery.
WHAT RESPONDENTS ARE SAYING …
 “Seasonal demand has not decreased at the typical pace.” (Primary Metals)
 “Incoming order rate remaining strong.” (Fabricated Metal Products)
 “Outlook for the remainder of the year and into 2014 is trending positive.” (Chemical Products)
 “Overall business climate is good. Business is steady.” (Transportation Equipment)
 “Sequestration and cutbacks in defense spending continue to impact business.” (Computer & Electronic Products)
 “Market continues to be stronger than normal for this time of year.” (Wood Products)
 “Getting much busier toward the end of the year.” (Furniture & Related Products)
 “Seeing consistent uptick in demand.” (Food, Beverage & Tobacco Products)
 “Federal debt, deficit and inefficiency are causing a level of caution and uncertainty.” (Machinery)
 “Ordering for 2014 seems to be increasing in comparison to the past six months.” (Miscellaneous Manufacturing)
MANUFACTURING AT A GLANCE
NOVEMBER 2013

Index Series
Index
Nov Series
Index
Oct Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI™ 57.3 56.4 +0.9 Growing Faster 6
New Orders 63.6 60.6 +3.0 Growing Faster 6
Production 62.8 60.8 +2.0 Growing Faster 6
Employment 56.5 53.2 +3.3 Growing Faster 5
Supplier Deliveries 53.2 54.7 -1.5 Slowing Slower 5
Inventories 50.5 52.5 -2.0 Growing Slower 2
Customers’ Inventories 45.0 47.0 -2.0 Too Low Faster 24
Prices 52.5 55.5 -3.0 Increasing Slower 4
Backlog of Orders 54.0 51.5 +2.5 Growing Faster 2
Exports 59.5 57.0 +2.5 Growing Faster 12
Imports 55.0 55.5 -0.5 Growing Slower 10

OVERALL ECONOMY Growing Faster 54
Manufacturing Sector Growing Faster 6
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Steel Coil; Steel — Cold Rolled; Steel — Hot Rolled; and Wood.
Commodities Down in Price
Aluminum; Caustic Soda (2); Corn Based Products; Fuel; Polypropylene Resin; and Sulfuric Acid.
Commodities in Short Supply
No commodities are reported in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.

________________________________________
NOVEMBER 2013 MANUFACTURING INDEX SUMMARIES
________________________________________
PMI™
Manufacturing expanded in November as the PMI™ registered 57.3 percent, an increase of 0.9 percentage point when compared to October’s reading of 56.4 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the November PMI™ indicates growth for the 54th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the sixth consecutive month. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through November (53.7 percent) corresponds to a 3.6 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for November (57.3 percent) is annualized, it corresponds to a 4.7 percent increase in real GDP annually.”
THE LAST 12 MONTHS
Month PMI™ Month PMI™
Nov 2013 57.3 May 2013 49.0
Oct 2013 56.4 Apr 2013 50.7
Sep 2013 56.2 Mar 2013 51.3
Aug 2013 55.7 Feb 2013 54.2
Jul 2013 55.4 Jan 2013 53.1
Jun 2013 50.9 Dec 2012 50.2
Average for 12 months – 53.4
High – 57.3
Low – 49.0

New Orders
ISM’s New Orders Index registered 63.6 percent in November, an increase of 3 percentage points when compared to the October reading of 60.6 percent. This represents growth in new orders for the sixth consecutive month, at a faster rate than in October. A New Orders Index above 52.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The 12 industries reporting growth in new orders in November — listed in order — are: Primary Metals; Textile Mills; Furniture & Related Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Transportation Equipment; Fabricated Metal Products; Paper Products; Miscellaneous Manufacturing; Chemical Products; Machinery; and Electrical Equipment, Appliances & Components. The two industries reporting a decrease in new orders during November are: Wood Products; and Nonmetallic Mineral Products.
New
Orders %
Better %
Same %
Worse
Net
Index
Nov 2013 36 46 18 +18 63.6
Oct 2013 29 54 17 +12 60.6
Sep 2013 32 53 15 +17 60.5
Aug 2013 33 52 15 +18 63.2

Production
ISM’s Production Index registered 62.8 percent in November, which is an increase of 2 percentage points when compared to the 60.8 percent reported in October. This month’s reading indicates growth in production for the sixth consecutive month, at a faster rate than in October. An index above 51.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The 13 industries reporting growth in production during the month of November — listed in order — are: Primary Metals; Textile Mills; Furniture & Related Products; Food, Beverage & Tobacco Products; Paper Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Miscellaneous Manufacturing; Transportation Equipment; Computer & Electronic Products; Chemical Products; and Machinery. The three industries reporting a decrease in production in November are: Apparel, Leather & Allied Products; Wood Products; and Nonmetallic Mineral Products.

Production %
Better %
Same %
Worse
Net
Index
Nov 2013 32 55 13 +19 62.8
Oct 2013 30 54 16 +14 60.8
Sep 2013 29 57 14 +15 62.6
Aug 2013 33 54 13 +20 62.4

Employment
ISM’s Employment Index registered 56.5 percent in November, which is 3.3 percentage points higher than the 53.2 percent reported in October. This month’s reading indicates expansion in employment for the fifth consecutive month, at a faster rate than in October. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, 11 reported growth in employment in November in the following order: Textile Mills; Printing & Related Support Activities; Plastics & Rubber Products; Wood Products; Furniture & Related Products; Petroleum & Coal Products; Primary Metals; Food, Beverage & Tobacco Products; Fabricated Metal Products; Computer & Electronic Products; and Miscellaneous Manufacturing. The four industries reporting a decrease in employment in November are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Machinery; and Transportation Equipment.

Employment %
Higher %
Same %
Lower
Net
Index
Nov 2013 18 70 12 +6 56.5
Oct 2013 21 63 16 +5 53.2
Sep 2013 20 66 14 +6 55.4
Aug 2013 22 63 15 +7 53.3

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in November at a slower rate relative to October as the Supplier Deliveries Index registered 53.2 percent. This month’s reading is 1.5 percentage points lower than the 54.7 percent reported in October. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The four industries reporting slower supplier deliveries in November are: Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; and Food, Beverage & Tobacco Products. The two industries reporting faster supplier deliveries in November are: Primary Metals; and Chemical Products. Twelve industries reported no change in supplier deliveries in November compared to October.
Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Nov 2013 6 89 5 +1 53.2
Oct 2013 11 83 6 +5 54.7
Sep 2013 10 86 4 +6 52.6
Aug 2013 12 81 7 +5 52.3

Inventories*
The Inventories Index registered 50.5 percent in November, which is 2 percentage points lower than the 52.5 percent reported in October. This month’s reading indicates that respondents are reporting inventories are growing, but at a slower rate relative to October’s reading. An Inventories Index greater than 42.7 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 November — listed in order — are: Plastics & Rubber Products; Nonmetallic Mineral Products; Petroleum & Coal Products; Furniture & Related Products; Chemical Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Paper Products; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing. The four industries reporting decreases in inventories in November are: Apparel, Leather & Allied Products; Fabricated Metal Products; Machinery; and Transportation Equipment.

Inventories %
Higher %
Same %
Lower
Net
Index
Nov 2013 21 59 20 +1 50.5
Oct 2013 25 55 20 +5 52.5
Sep 2013 19 62 19 0 50.0
Aug 2013 16 63 21 -5 47.5

Customers’ Inventories*
The ISM Customers’ Inventories Index registered 45 percent in November, which is 2 percentage points lower than in October when the index registered 47 percent. This month’s reading indicates that customers’ inventories are considered too low, and lower than reported in October. Customers’ inventories have registered at or below 50 percent for 56 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.
The three manufacturing industries reporting customers’ inventories as being too high during the month of November are: Petroleum & Coal Products; Chemical Products; and Electrical Equipment, Appliances & Components. The 10 industries reporting customers’ inventories as too low during November — listed in order — are: Primary Metals; Plastics & Rubber Products; Textile Mills; Fabricated Metal Products; Machinery; Furniture & Related Products; Transportation Equipment; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing.
Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Nov 2013 65 12 66 22 -10 45.0
Oct 2013 60 12 70 18 -6 47.0
Sep 2013 71 10 66 24 -14 43.0
Aug 2013 66 9 67 24 -15 42.5

Prices*
The ISM Prices Index registered 52.5 percent in November, which is a decrease of 3 percentage points compared to the October reading of 55.5 percent. This month’s reading indicates an increase in raw materials prices for the fourth consecutive month. In November, 18 percent of respondents reported paying higher prices, 13 percent reported paying lower prices, and 69 percent of supply executives reported paying the same prices as in October. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, seven reported paying increased prices during the month of November in the following order: Textile Mills; Wood Products; Fabricated Metal Products; Miscellaneous Manufacturing; Machinery; Food, Beverage & Tobacco Products; and Transportation Equipment. The six industries reporting paying lower prices during November — listed in order — are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Primary Metals; Furniture & Related Products; Chemical Products; and Paper Products.

Prices %
Higher %
Same %
Lower
Net
Index
Nov 2013 18 69 13 +5 52.5
Oct 2013 22 67 11 +11 55.5
Sep 2013 22 69 9 +13 56.5
Aug 2013 21 66 13 +8 54.0

Backlog of Orders*
ISM’s Backlog of Orders Index registered 54 percent in November, which is 2.5 percentage points higher than the 51.5 percent reported in October. This is the second consecutive month of expanding order backlogs. Of the 85 percent of respondents who reported their backlog of orders, 24 percent reported greater backlogs, 16 percent reported smaller backlogs, and 60 percent reported no change from October.
The 10 industries reporting increased order backlogs in November — listed in order — are: Nonmetallic Mineral Products; Furniture & Related Products; Primary Metals; Food, Beverage & Tobacco Products; Paper Products; Plastics & Rubber Products; Transportation Equipment; Fabricated Metal Products; Miscellaneous Manufacturing; and Chemical Products. The four industries reporting decreases in order backlogs during November are: Wood Products; Electrical Equipment, Appliances & Components; Machinery; and Computer & Electronic Products.
Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Nov 2013 85 24 60 16 +8 54.0
Oct 2013 86 24 55 21 +3 51.5
Sep 2013 86 19 61 20 -1 49.5
Aug 2013 85 16 61 23 -7 46.5

New Export Orders*
ISM’s New Export Orders Index registered 59.5 percent in November, which is 2.5 percentage points higher than the 57 percent reported in October. November’s reading reflects growth in the level of exports relative to October, and is the highest reading since February 2012 when the index also registered 59.5 percent. This month’s reading also represents the 12th consecutive month of growth in new export orders.
The nine industries reporting growth in new export orders in November — listed in order — are: Furniture & Related Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Machinery; Transportation Equipment; Miscellaneous Manufacturing; Paper Products; and Chemical Products. No industries reported a decrease in new export orders during November. Nine industries reported no change in new export orders in November compared to October.
New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Nov 2013 75 22 75 3 +19 59.5
Oct 2013 78 19 76 5 +14 57.0
Sep 2013 76 14 76 10 +4 52.0
Aug 2013 74 17 77 6 +11 55.5

Imports*
ISM’s Imports Index registered 55 percent in November, which is 0.5 percentage point lower than the 55.5 percent reported in October. November’s reading reflects growth in the level of imports relative to October, but at a slightly slower rate. This month’s reading also represents the 12th consecutive month that the Imports Index has registered at or above 50 percent.
The 10 industries reporting growth in imports during the month of November — listed in order — are: Plastics & Rubber Products; Textile Mills; Primary Metals; Fabricated Metal Products; Machinery; Transportation Equipment; Miscellaneous Manufacturing; Chemical Products; Computer & Electronic Products; and Furniture & Related Products. The three industries reporting a decrease in imports during November are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Nov 2013 78 19 72 9 +10 55.0
Oct 2013 77 18 75 7 +11 55.5
Sep 2013 77 19 72 9 +10 55.0
Aug 2013 77 21 74 5 +16 58.0
* The Inventories, 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 decreased 4 days to 122 days. Average lead time for Production Materials decreased 10 days to 53 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies decreased 5 days to 27 days.
Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Nov 2013 25 7 13 17 23 15 122
Oct 2013 25 7 13 14 25 16 126
Sep 2013 26 7 14 17 25 11 112
Aug 2013 28 4 15 13 24 16 124

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Nov 2013 17 37 30 10 4 2 53
Oct 2013 15 36 25 16 4 4 63
Sep 2013 17 37 23 16 4 3 58
Aug 2013 16 37 21 20 3 3 59

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Nov 2013 45 37 13 4 1 0 27
Oct 2013 41 41 11 4 2 1 32
Sep 2013 45 40 11 3 1 0 25
Aug 2013 45 39 11 4 1 0 26

About this Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).
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 (PMI™, New Orders, Production, Employment and Supplier Deliveries) 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 supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The 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 PMI™ reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI™ in excess of 42.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.2 percent, it is generally declining. The distance from 50 percent or 42.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.
The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, the first supply institute in the world. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM Report On Business® is posted on ISM’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM Report On Business® featuring the December 2013 data will be released at 10:00 a.m. (ET) on Thursday, January 2, 2014.

October 2013 Manufacturing ISM Report On Business®PMI™ at 56.4%

October 2013 Manufacturing ISM Report On Business®PMI™ at 56.4%

New Orders, Production and Employment Growing
Inventories Growing
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in October for the fifth consecutive month, and the overall economy grew for the 53rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI™ registered 56.4 percent, an increase of 0.2 percentage point from September’s reading of 56.2 percent. The PMI™ has increased progressively each month since June, with October’s reading reflecting the highest PMI™ in 2013. The New Orders Index increased slightly in October by 0.1 percentage point to 60.6 percent, while the Production Index decreased by 1.8 percentage points to 60.8 percent. Both the New Orders and Production Indexes have registered above 60 percent for three consecutive months. The Employment Index registered 53.2 percent, a decrease of 2.2 percentage points compared to September’s reading of 55.4 percent. The panel’s comments are generally positive about the current business climate; however, there are mixed responses on whether the government shutdown and potential default have had any effect on October’s results.”
Of the 18 manufacturing industries, 14 are reporting growth in October in the following order: Textile Mills; Food, Beverage & Tobacco Products; Furniture & Related Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Transportation Equipment; Petroleum & Coal Products; Wood Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Machinery; Paper Products; and Fabricated Metal Products. The four industries reporting contraction in October are: Apparel, Leather & Allied Products; Primary Metals; Chemical Products; and Miscellaneous Manufacturing.
WHAT RESPONDENTS ARE SAYING …
 “New business is booming.” (Textile Mills)
 “The government shutting down and threatening to go into a default position is causing all kinds of concerns in our markets.” (Fabricated Metal Products)
 “The government shutdown has not had any impact on our business that I can determine, nor has it impacted any supplier shipments.” (Chemical Products)
 “Government spending continues to be slow in defense and military. The government shutdown and debt ceiling crisis did not affect business.” (Transportation Equipment)
 “Telecom market — wireless and VOIP — appear to be spiking. We are very busy; busier than we have ever been.” (Computer & Electronic Products)
 “Seasonal demand has not decreased at the typical pace. Market showing resiliency in the residential market.” (Primary Metals)
 “Business continues to improve every month for the past nine months.” (Furniture & Related Products)
 “Big Box Store discounting providing increased sales bump short term.” (Food, Beverage & Tobacco Products)
 “Our customers continue to be cautious and are closely managing their purchases. Business continues to be flat to slightly down.” (Machinery)
 “Outlook on general appliance market continues in a positive direction. Uncertainty, however, looms with unclear government direction pending.” (Electrical Equipment, Appliances & Components)
MANUFACTURING AT A GLANCE
OCTOBER 2013

Index Series
Index
Oct Series
Index
Sep Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI™ 56.4 56.2 +0.2 Growing Faster 5
New Orders 60.6 60.5 +0.1 Growing Faster 5
Production 60.8 62.6 -1.8 Growing Slower 5
Employment 53.2 55.4 -2.2 Growing Slower 4
Supplier Deliveries 54.7 52.6 +2.1 Slowing Faster 4
Inventories 52.5 50.0 +2.5 Growing From Unchanged 1
Customers’ Inventories 47.0 43.0 +4.0 Too Low Slower 23
Prices 55.5 56.5 -1.0 Increasing Slower 3
Backlog of Orders 51.5 49.5 +2.0 Growing From Contracting 1
Exports 57.0 52.0 +5.0 Growing Faster 11
Imports 55.5 55.0 +0.5 Growing Faster 9

OVERALL ECONOMY Growing Faster 53
Manufacturing Sector Growing Faster 5
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Corrugated Boxes (15); HDPE Resin (2); LDPE Resin; Polypropylene Resin; Stainless Steel; Steel — HRPO; and Steel Based Products.
Commodities Down in Price
Caustic Soda is the only commodity reported down in price.
Commodities in Short Supply
Electrical Components; and Helium.
Note: The number of consecutive months the commodity is listed is indicated after each item.

________________________________________
OCTOBER 2013 MANUFACTURING INDEX SUMMARIES
________________________________________
PMI™
Manufacturing expanded in October as the PMI™ registered 56.4 percent, an increase of 0.2 percentage point when compared to September’s reading of 56.2 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the October PMI™ indicates growth for the 53rd consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the fifth consecutive month. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through October (53.3 percent) corresponds to a 3.5 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for October (56.4 percent) is annualized, it corresponds to a 4.4 percent increase in real GDP annually.”
THE LAST 12 MONTHS
Month PMI™ Month PMI™
Oct 2013 56.4 Apr 2013 50.7
Sep 2013 56.2 Mar 2013 51.3
Aug 2013 55.7 Feb 2013 54.2
Jul 2013 55.4 Jan 2013 53.1
Jun 2013 50.9 Dec 2012 50.2
May 2013 49.0 Nov 2012 49.9
Average for 12 months – 52.8
High – 56.4
Low – 49.0

New Orders
ISM’s New Orders Index registered 60.6 percent in October, an increase of 0.1 percentage point when compared to the September reading of 60.5 percent. This represents growth in new orders for the fifth consecutive month, at a slightly faster rate than in September. A New Orders Index above 52.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The 10 industries reporting growth in new orders in October — listed in order — are: Textile Mills; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Machinery; Computer & Electronic Products; and Transportation Equipment. The four industries reporting a decrease in new orders during October are: Miscellaneous Manufacturing; Primary Metals; Paper Products; and Chemical Products.
New
Orders %
Better %
Same %
Worse
Net
Index
Oct 2013 29 54 17 +12 60.6
Sep 2013 32 53 15 +17 60.5
Aug 2013 33 52 15 +18 63.2
Jul 2013 29 49 22 +7 58.3

Production
ISM’s Production Index registered 60.8 percent in October, which is a decrease of 1.8 percentage points when compared to the 62.6 percent reported in September. This month’s reading indicates growth in production for the fifth consecutive month, but at a moderately slower rate than in September. An index above 51.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The 12 industries reporting growth in production during the month of October — listed in order — are: Textile Mills; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Furniture & Related Products; Plastics & Rubber Products; Machinery; Transportation Equipment; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Petroleum & Coal Products; and Miscellaneous Manufacturing. The three industries reporting a decrease in production in October are: Apparel, Leather & Allied Products; Primary Metals; and Chemical Products.

Production %
Better %
Same %
Worse
Net
Index
Oct 2013 30 54 16 +14 60.8
Sep 2013 29 57 14 +15 62.6
Aug 2013 33 54 13 +20 62.4
Jul 2013 30 55 15 +15 65.0

Employment
ISM’s Employment Index registered 53.2 percent in October, which is 2.2 percentage points lower than the 55.4 percent reported in September. This month’s reading indicates expansion in employment for the fourth consecutive month, but at a slower rate than in September. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, 12 reported growth in employment in October in the following order: Textile Mills; Wood Products; Printing & Related Support Activities; Furniture & Related Products; Primary Metals; Paper Products; Plastics & Rubber Products; Transportation Equipment; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Petroleum & Coal Products. The five industries reporting a decrease in employment in October are: Apparel, Leather & Allied Products; Chemical Products; Miscellaneous Manufacturing; Machinery; and Computer & Electronic Products.

Employment %
Higher %
Same %
Lower
Net
Index
Oct 2013 21 63 16 +5 53.2
Sep 2013 20 66 14 +6 55.4
Aug 2013 22 63 15 +7 53.3
Jul 2013 21 67 12 +9 54.4

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in October at a faster rate relative to September as the Supplier Deliveries Index registered 54.7 percent. This month’s reading is 2.1 percentage points higher than the 52.6 percent reported in September. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The six industries reporting slower supplier deliveries in October — listed in order — are: Computer & Electronic Products; Petroleum & Coal Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; and Food, Beverage & Tobacco Products. The three industries reporting faster supplier deliveries in October are: Primary Metals; Electrical Equipment, Appliances & Components; and Fabricated Metal Products. Nine industries reported no change in supplier deliveries in October compared to September.
Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Oct 2013 11 83 6 +5 54.7
Sep 2013 10 86 4 +6 52.6
Aug 2013 12 81 7 +5 52.3
Jul 2013 11 85 4 +7 52.1

Inventories*
The Inventories Index registered 52.5 percent in October, which is 2.5 percentage points higher than the 50 percent reported in September. This month’s reading indicates that respondents are reporting inventories are growing relative to September’s unchanged reading. An Inventories Index greater than 42.7 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 six industries reporting higher inventories in October — listed in order — are: Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Computer & Electronic Products; Paper Products; Petroleum & Coal Products; and Miscellaneous Manufacturing. The six industries reporting decreases in inventories in October — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Machinery; Fabricated Metal Products; Transportation Equipment; and Chemical Products. Six industries reported no change in raw materials inventories in October compared to September.

Inventories %
Higher %
Same %
Lower
Net
Index
Oct 2013 25 55 20 +5 52.5
Sep 2013 19 62 19 0 50.0
Aug 2013 16 63 21 -5 47.5
Jul 2013 15 64 21 -6 47.0

Customers’ Inventories*
The ISM Customers’ Inventories Index registered 47 percent in October, which is 4 percentage points higher than in September when the index registered 43 percent. This month’s reading indicates that customers’ inventories are considered too low, but higher than reported in September. Customers’ inventories have registered at or below 50 percent for 55 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.
The five manufacturing industries reporting customers’ inventories as being too high during the month of October are: Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Paper Products; Food, Beverage & Tobacco Products; and Chemical Products. The six industries reporting customers’ inventories as too low during October — listed in order — are: Primary Metals; Plastics & Rubber Products; Machinery; Fabricated Metal Products; Computer & Electronic Products; and Transportation Equipment. Seven industries reported no change in customer inventories in October compared to September.
Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Oct 2013 60 12 70 18 -6 47.0
Sep 2013 71 10 66 24 -14 43.0
Aug 2013 66 9 67 24 -15 42.5
Jul 2013 67 12 71 17 -5 47.5

Prices*
The ISM Prices Index registered 55.5 percent in October, which is a decrease of 1 percentage point compared to the September reading of 56.5 percent. This month’s reading indicates an increase in raw materials prices for the third consecutive month. In October, 22 percent of respondents reported paying higher prices, 11 percent reported paying lower prices, and 67 percent of supply executives reported paying the same prices as in September. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, eight reported paying increased prices during the month of October in the following order: Plastics & Rubber Products; Miscellaneous Manufacturing; Fabricated Metal Products; Machinery; Chemical Products; Paper Products; Food, Beverage & Tobacco Products; and Transportation Equipment. The only industry reporting paying lower prices during October is Petroleum & Coal Products. Nine industries reported no change in the price of raw materials in October compared to September.

Prices %
Higher %
Same %
Lower
Net
Index
Oct 2013 22 67 11 +11 55.5
Sep 2013 22 69 9 +13 56.5
Aug 2013 21 66 13 +8 54.0
Jul 2013 20 58 22 -2 49.0

Backlog of Orders*
ISM’s Backlog of Orders Index registered 51.5 percent in October, which is 2 percentage points higher than the 49.5 percent reported in September. This is the first month of expanding order backlogs since April 2013, when the index registered 53 percent. Of the 86 percent of respondents who reported their backlog of orders, 24 percent reported greater backlogs, 21 percent reported smaller backlogs, and 55 percent reported no change from September.
The seven industries reporting increased order backlogs in October — listed in order — are: Textile Mills; Furniture & Related Products; Plastics & Rubber Products; Petroleum & Coal Products; Chemical Products; Machinery; and Computer & Electronic Products. The six industries reporting decreases in order backlogs during October — listed in order — are: Apparel, Leather & Allied Products; Wood Products; Miscellaneous Manufacturing; Primary Metals; Fabricated Metal Products; and Food, Beverage & Tobacco Products.
Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Oct 2013 86 24 55 21 +3 51.5
Sep 2013 86 19 61 20 -1 49.5
Aug 2013 85 16 61 23 -7 46.5
Jul 2013 86 15 60 25 -10 45.0

New Export Orders*
ISM’s New Export Orders Index registered 57 percent in October, which is 5 percentage points higher than the 52 percent reported in September. October’s reading reflects growth in the level of exports relative to September, and is the highest reading since April 2012 when the index registered 59 percent. This month’s reading also represents the 11th consecutive month of growth in new export orders.
The 10 industries reporting growth in new export orders in October — listed in order — are: Wood Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Machinery; Furniture & Related Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Transportation Equipment; and Chemical Products. The two industries reporting a decrease in new export orders during October are: Primary Metals; and Paper Products. Six industries reported no change in new export orders in October compared to September.
New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Oct 2013 78 19 76 5 +14 57.0
Sep 2013 76 14 76 10 +4 52.0
Aug 2013 74 17 77 6 +11 55.5
Jul 2013 75 15 77 8 +7 53.5

Imports*
ISM’s Imports Index registered 55.5 percent in October, which is 0.5 percentage point higher than the 55 percent reported in September. October’s reading reflects growth in the level of imports relative to September, at a slightly faster rate. This month’s reading also represents the 11th consecutive month that the Imports Index has registered at or above 50 percent.
The eight industries reporting growth in imports during the month of October — listed in order — are: Furniture & Related Products; Plastics & Rubber Products; Machinery; Computer & Electronic Products; Fabricated Metal Products; Transportation Equipment; Chemical Products; and Food, Beverage & Tobacco Products. The three industries reporting a decrease in imports during October are: Primary Metals; Apparel, Leather & Allied Products; and Miscellaneous Manufacturing. Seven industries reported no change in imports in October compared to September.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Oct 2013 77 18 75 7 +11 55.5
Sep 2013 77 19 72 9 +10 55.0
Aug 2013 77 21 74 5 +16 58.0
Jul 2013 77 22 71 7 +15 57.5

* The Inventories, 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 increased 14 days to 126 days. Average lead time for Production Materials increased 5 days to 63 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 7 days to 32 days.
Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Oct 2013 25 7 13 14 25 16 126
Sep 2013 26 7 14 17 25 11 112
Aug 2013 28 4 15 13 24 16 124
Jul 2013 29 3 13 15 26 14 121

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Oct 2013 15 36 25 16 4 4 63
Sep 2013 17 37 23 16 4 3 58
Aug 2013 16 37 21 20 3 3 59
Jul 2013 18 33 21 20 4 4 63

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Oct 2013 41 41 11 4 2 1 32
Sep 2013 45 40 11 3 1 0 25
Aug 2013 45 39 11 4 1 0 26
Jul 2013 44 37 13 5 1 0 27

About this Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).
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 (PMI™, New Orders, Production, Employment and Supplier Deliveries) 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 supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The 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 PMI™ reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI™ in excess of 42.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.2 percent, it is generally declining. The distance from 50 percent or 42.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.
The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, the first supply institute in the world. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM Report On Business® is posted on ISM’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM Report On Business® featuring the November 2013 data will be released at 10:00 a.m. (ET) on Monday, December 2, 2013.

September 2013 Manufacturing ISM Report On Business® PMI™ at 56.2%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, 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 September 2013.

New Orders, Production and Employment Growing
Inventories Unchanged
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in September for the fourth consecutive month, and the overall economy grew for the 52nd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “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. Comments from the panel are generally positive and optimistic about increasing demand and improving business conditions.”

Of the 18 manufacturing industries, 11 are reporting growth in September in the following order: Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Furniture & Related Products; Petroleum & Coal Products; Fabricated Metal Products; Paper Products; Printing & Related Support Activities; Transportation Equipment; Computer & Electronic Products; Machinery; and Plastics & Rubber Products. The six industries reporting contraction in September — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Textile Mills; Nonmetallic Mineral Products; Miscellaneous Manufacturing; and Chemical Products.

WHAT RESPONDENTS ARE SAYING …
“Global sales generally trending moderately higher.” (Textile Mills)
“Slight increase in demand. Forecast looks better. 4Q looking better than 3Q — should begin to see demand increase in October/November.” (Food, Beverage & Tobacco Products)
“Raw materials shortages continue. General trends are up, which enhances shortage issues.” (Wood Products)
“Overall business is flat to down across the board.” (Machinery)
“Housing continues to improve, resulting in improved conditions for our industry.” (Furniture & Related Products)
“Rising costs of China labor has us re-evaluating our current position in that country.” (Computer & Electronic Products)
“Steady increase in work this month.” (Primary Metals)
“Overall business is picking up.” (Transportation Equipment)
“Outlook remains strong with housing market and customer orders.” (Electrical Equipment, Appliances & Components)
“Labor rates along the Gulf Coast are rising with the increased activity of construction and maintenance projects.” (Chemical Products)
MANUFACTURING AT A GLANCE
SEPTEMBER 2013

Index Series
Index
Sep Series
Index
Aug Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI™ 56.2 55.7 +0.5 Growing Faster 4
New Orders 60.5 63.2 -2.7 Growing Slower 4
Production 62.6 62.4 +0.2 Growing Faster 4
Employment 55.4 53.3 +2.1 Growing Faster 3
Supplier Deliveries 52.6 52.3 +0.3 Slowing Faster 3
Inventories 50.0 47.5 +2.5 Unchanged From Contracting 1
Customers’ Inventories 43.0 42.5 +0.5 Too Low Slower 22
Prices 56.5 54.0 +2.5 Increasing Faster 2
Backlog of Orders 49.5 46.5 +3.0 Contracting Slower 5
Exports 52.0 55.5 -3.5 Growing Slower 10
Imports 55.0 58.0 -3.0 Growing Slower 8

OVERALL ECONOMY Growing Faster 52
Manufacturing Sector Growing Faster 4
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum; Aluminum Based Products; Caustic Soda; Corrugated Boxes (14); HDPE Resin; Metal Parts; Oil (3); Plastic Resin (3); and Steel Based Products.

Commodities Down in Price
Corn (2); and Latex.

Commodities in Short Supply
No commodities are reported in short supply.

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

SEPTEMBER 2013 MANUFACTURING INDEX SUMMARIES
PMI™
Manufacturing expanded in September as the PMI™ registered 56.2 percent, an increase of 0.5 percentage point when compared to August’s reading of 55.7 percent. September’s reading reflects the highest overall PMI™ reading in 2013. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the September PMI™ indicates growth for the 52nd consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the fourth consecutive month. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through September (52.9 percent) corresponds to a 3.3 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for September (56.2 percent) is annualized, it corresponds to a 4.4 percent increase in real GDP annually.”

THE LAST 12 MONTHS
Month PMI™ Month PMI™
Sep 2013 56.2 Mar 2013 51.3
Aug 2013 55.7 Feb 2013 54.2
Jul 2013 55.4 Jan 2013 53.1
Jun 2013 50.9 Dec 2012 50.2
May 2013 49.0 Nov 2012 49.9
Apr 2013 50.7 Oct 2012 51.7
Average for 12 months – 52.4
High – 56.2
Low – 49.0

New Orders
ISM’s New Orders Index registered 60.5 percent in September, a decrease of 2.7 percentage points when compared to the August reading of 63.2 percent. This represents growth in new orders for the fourth consecutive month, but at a moderately slower rate than in August. A New Orders Index above 52.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The 12 industries reporting growth in new orders in September — listed in order — are: Textile Mills; Plastics & Rubber Products; Petroleum & Coal Products; Fabricated Metal Products; Printing & Related Support Activities; Furniture & Related Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Paper Products; Transportation Equipment; and Computer & Electronic Products. The three industries reporting a decrease in new orders during September are: Nonmetallic Mineral Products; Primary Metals; and Machinery.

New
Orders %
Better %
Same %
Worse
Net
Index
Sep 2013 32 53 15 +17 60.5
Aug 2013 33 52 15 +18 63.2
Jul 2013 29 49 22 +7 58.3
Jun 2013 30 49 21 +9 51.9

Production
ISM’s Production Index registered 62.6 percent in September, which is an increase of 0.2 percentage point when compared to the 62.4 percent reported in August. This month’s reading indicates growth in production for the fourth consecutive month. An index above 51.2 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 September — listed in order — are: Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; Paper Products; Fabricated Metal Products; Petroleum & Coal Products; Transportation Equipment; Computer & Electronic Products; Miscellaneous Manufacturing; and Chemical Products. The five industries reporting a decrease in production in September are: Textile Mills; Apparel, Leather & Allied Products; Primary Metals; Plastics & Rubber Products; and Nonmetallic Mineral Products.

Production %
Better %
Same %
Worse
Net
Index
Sep 2013 29 57 14 +15 62.6
Aug 2013 33 54 13 +20 62.4
Jul 2013 30 55 15 +15 65.0
Jun 2013 28 55 17 +11 53.4

Employment
ISM’s Employment Index registered 55.4 percent in September, which is 2.1 percentage points higher than the 53.3 percent reported in August. This month’s reading indicates expansion in employment for the third consecutive month. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, eight reported growth in employment in September in the following order: Electrical Equipment, Appliances & Components; Wood Products; Printing & Related Support Activities; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; Chemical Products; and Fabricated Metal Products. The six industries reporting a decrease in employment in September — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Transportation Equipment; and Computer & Electronic Products.

Employment %
Higher %
Same %
Lower
Net
Index
Sep 2013 20 66 14 +6 55.4
Aug 2013 22 63 15 +7 53.3
Jul 2013 21 67 12 +9 54.4
Jun 2013 19 65 16 +3 48.7

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in September at a slightly faster rate relative to August as the Supplier Deliveries Index registered 52.6 percent. This month’s reading is 0.3 percentage point higher than the 52.3 percent reported in August. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The seven industries reporting slower supplier deliveries in September — listed in order — are: Petroleum & Coal Products; Fabricated Metal Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Transportation Equipment; and Machinery. The three industries reporting faster supplier deliveries in September are: Miscellaneous Manufacturing; Chemical Products; and Electrical Equipment, Appliances & Components. Eight industries reported no change in supplier deliveries in September compared to August.

Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Sep 2013 10 86 4 +6 52.6
Aug 2013 12 81 7 +5 52.3
Jul 2013 11 85 4 +7 52.1
Jun 2013 9 84 7 +2 50.0

Inventories*
The Inventories Index registered 50 percent in September, which is 2.5 percentage points higher than the 47.5 percent reported in August. This month’s reading indicates that respondents are reporting inventories are unchanged from August. For the first nine months of 2013, inventories of raw materials have registered in a well-managed range from a high of 51.5 percent in February to a low of 46.5 percent in April. An Inventories Index greater than 42.7 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 seven industries reporting higher inventories in September — listed in order — are: Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Transportation Equipment; Furniture & Related Products; Machinery; and Computer & Electronic Products. The nine industries reporting decreases in inventories in September — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Wood Products; Chemical Products; Primary Metals; Paper Products; and Fabricated Metal Products.

Inventories %
Higher %
Same %
Lower
Net
Index
Sep 2013 19 62 19 0 50.0
Aug 2013 16 63 21 -5 47.5
Jul 2013 15 64 21 -6 47.0
Jun 2013 19 63 18 +1 50.5

Customers’ Inventories*
The ISM Customers’ Inventories Index registered 43 percent in September, which is 0.5 percentage point higher than in August when the index registered 42.5 percent. This month’s reading indicates that customers’ inventories are considered too low, but slightly higher than reported in August. Customers’ inventories have registered at or below 50 percent for 54 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.

The five manufacturing industries reporting customers’ inventories as being too high during the month of September are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Chemical Products; and Machinery. The 10 industries reporting customers’ inventories as too low during September — listed in order — are: Textile Mills; Furniture & Related Products; Primary Metals; Computer & Electronic Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Plastics & Rubber Products; Fabricated Metal Products; and Food, Beverage & Tobacco Products.

Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Sep 2013 71 10 66 24 -14 43.0
Aug 2013 66 9 67 24 -15 42.5
Jul 2013 67 12 71 17 -5 47.5
Jun 2013 66 10 70 20 -10 45.0

Prices*
The ISM Prices Index registered 56.5 percent in September, which is an increase of 2.5 percentage points compared to the August reading of 54 percent. This month’s reading indicates an increase in raw materials prices for the second consecutive month. In September, 22 percent of respondents reported paying higher prices, 9 percent reported paying lower prices, and 69 percent of supply executives reported paying the same prices as in August. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.

Of the 18 manufacturing industries, 12 reported paying increased prices during the month of September in the following order: Wood Products; Printing & Related Support Activities; Plastics & Rubber Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Chemical Products; Transportation Equipment; Paper Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Machinery. The only industry reporting paying lower prices during September is Primary Metals.

Prices %
Higher %
Same %
Lower
Net
Index
Sep 2013 22 69 9 +13 56.5
Aug 2013 21 66 13 +8 54.0
Jul 2013 20 58 22 -2 49.0
Jun 2013 20 65 15 +5 52.5

Backlog of Orders*
ISM’s Backlog of Orders Index registered 49.5 percent in September, which is 3 percentage points higher than the 46.5 percent reported in August. This is the fifth consecutive month of contracting order backlogs. Of the 86 percent of respondents who reported their backlog of orders, 19 percent reported greater backlogs, 20 percent reported smaller backlogs, and 61 percent reported no change from August.

The eight industries reporting increased order backlogs in September — listed in order — are: Textile Mills; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Paper Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Furniture & Related Products. The five industries reporting decreases in order backlogs during September are: Apparel, Leather & Allied Products; Machinery; Transportation Equipment; Miscellaneous Manufacturing; and Chemical Products.

Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Sep 2013 86 19 61 20 -1 49.5
Aug 2013 85 16 61 23 -7 46.5
Jul 2013 86 15 60 25 -10 45.0
Jun 2013 84 17 59 24 -7 46.5

New Export Orders*
ISM’s New Export Orders Index registered 52 percent in September, which is 3.5 percentage points lower than the 55.5 percent reported in August. September’s reading reflects growth in the level of exports relative to August, but at a moderately slower level. This month’s reading also represents the 10th consecutive month of growth in new export orders.

The six industries reporting growth in new export orders in September — listed in order — are: Textile Mills; Wood Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Machinery; and Transportation Equipment. The four industries reporting a decrease in new export orders during September are: Apparel, Leather & Allied Products; Furniture & Related Products; Paper Products; and Food, Beverage & Tobacco Products. Eight industries reported no change in new export orders in September compared to August.

New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Sep 2013 76 14 76 10 +4 52.0
Aug 2013 74 17 77 6 +11 55.5
Jul 2013 75 15 77 8 +7 53.5
Jun 2013 74 15 79 6 +9 54.5

Imports*
ISM’s Imports Index registered 55 percent in September, which is 3 percentage points lower than the 58 percent reported in August. September’s reading reflects growth in the level of imports relative to August, but at a moderately slower level. This month’s reading also represents the 10th consecutive month that the Imports Index has registered at or above 50 percent.

The 10 industries reporting growth in imports during the month of September — listed in order — are: Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Transportation Equipment; and Furniture & Related Products. The three industries reporting a decrease in imports during September are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; and Chemical Products.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Sep 2013 77 19 72 9 +10 55.0
Aug 2013 77 21 74 5 +16 58.0
Jul 2013 77 22 71 7 +15 57.5
Jun 2013 76 20 72 8 +12 56.0

* The Inventories, 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 decreased 12 days to 112 days. Average lead time for Production Materials decreased 1 day to 58 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies decreased 1 day to 25 days.

Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Sep 2013 26 7 14 17 25 11 112
Aug 2013 28 4 15 13 24 16 124
Jul 2013 29 3 13 15 26 14 121
Jun 2013 28 3 12 14 29 14 125

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Sep 2013 17 37 23 16 4 3 58
Aug 2013 16 37 21 20 3 3 59
Jul 2013 18 33 21 20 4 4 63
Jun 2013 16 36 23 18 4 3 60

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Sep 2013 45 40 11 3 1 0 25
Aug 2013 45 39 11 4 1 0 26
Jul 2013 44 37 13 5 1 0 27
Jun 2013 46 38 12 3 1 0 25

About this Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).

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 (PMI™, New Orders, Production, Employment and Supplier Deliveries) 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 supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The 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 PMI™ reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI™ in excess of 42.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.2 percent, it is generally declining. The distance from 50 percent or 42.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.

The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, the first supply institute in the world. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM Report On Business® is posted on ISM’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).

The next Manufacturing ISM Report On Business® featuring the October 2013 data will be released at 10:00 a.m. (ET) on Friday, November 1, 2013.

August 2013 Manufacturing ISM Report On Business®PMI™ at 55.7%

August 2013 Manufacturing ISM Report On Business®
PMI™ at 55.7%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire United States, 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 August 2013.

New Orders, Production and Employment Growing
Inventories Contracting
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in August for the third consecutive month, and the overall economy grew for the 51st consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI™ registered 55.7 percent, an increase of 0.3 percentage point from July’s reading of 55.4 percent. August’s PMI™ reading, the highest of the year, indicates expansion in the manufacturing sector for the third consecutive month. The New Orders Index increased in August by 4.9 percentage points to 63.2 percent, and the Production Index decreased by 2.6 percentage points to 62.4 percent. The Employment Index registered 53.3 percent, a decrease of 1.1 percentage points compared to July’s reading of 54.4 percent. The Prices Index registered 54 percent, increasing 5 percentage points from July, indicating that overall raw materials prices increased when compared to last month. Comments from the panel range from slow to improving business conditions depending upon the industry.”
Of the 18 manufacturing industries, 15 are reporting growth in August in the following order: Textile Mills; Wood Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Printing & Related Support Activities; Furniture & Related Products; Primary Metals; Fabricated Metal Products; Transportation Equipment; Machinery; Chemical Products; and Paper Products. The only industry reporting contraction in August is Miscellaneous Manufacturing.
WHAT RESPONDENTS ARE SAYING …
 “Slight improvements in both domestic and international sales.” (Fabricated Metal Products)
 “Business is slowing down, not sure why — but we may end up below last year’s sales levels, whereas we had forecast 6.5 percent growth.” (Miscellaneous Manufacturing)
 “Material prices continue to be favorable; business is steady.” (Paper Products)
 “Slowing down slightly, but still stronger than last year by 20 percent.” (Furniture & Related Products)
 “Military slowdown affecting business.” (Computer & Electronic Products)
 “Summer seasonal businesses are doing well after a late start.” (Printing & Related Support Activities)
 “Still not seeing the year we had expected. Cautious about the balance of 2013.” (Machinery)
 “Tight government spending still affecting business.” (Transportation Equipment)
 “With improved weather outlook in the central states, agricultural prices are relaxing year over year.” (Food, Beverage & Tobacco Products)
 “We have benefitted from the Yen; seeing a 20 percent decrease in material costs from 2012 to 2013.” (Chemical Products)
MANUFACTURING AT A GLANCE
AUGUST 2013

Index Series
Index
Aug Series
Index
Jul Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI™ 55.7 55.4 +0.3 Growing Faster 3
New Orders 63.2 58.3 +4.9 Growing Faster 3
Production 62.4 65.0 -2.6 Growing Slower 3
Employment 53.3 54.4 -1.1 Growing Slower 2
Supplier Deliveries 52.3 52.1 +0.2 Slowing Faster 2
Inventories 47.5 47.0 +0.5 Contracting Slower 2
Customers’ Inventories 42.5 47.5 -5.0 Too Low Faster 21
Prices 54.0 49.0 +5.0 Increasing From Decreasing 1
Backlog of Orders 46.5 45.0 +1.5 Contracting Slower 4
Exports 55.5 53.5 +2.0 Growing Faster 9
Imports 58.0 57.5 +0.5 Growing Faster 7

OVERALL ECONOMY Growing Faster 51
Manufacturing Sector Growing Faster 3
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Corrugated Boxes (13); Corrugated Packaging (4); Lumber; Oil (2); Oil Based Products (2); Plastic Resin (2); Polypropylene (3); Steel — Cold Rolled; and Steel — Hot Rolled (2).
Commodities Down in Price
Corn; Stainless Steel Surcharges; Steel (5); Sugar (4); and Sulfuric Acid.
Commodities in Short Supply
No commodities are listed in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.

________________________________________
AUGUST 2013 MANUFACTURING INDEX SUMMARIES
________________________________________
PMI™
Manufacturing expanded in August as the PMI™ registered 55.7 percent, an increase of 0.3 percentage point when compared to July’s reading of 55.4 percent. August’s reading reflects the highest overall PMI™ reading in 2013. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the August PMI™ indicates growth for the 51st consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the third consecutive month. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through August (52.5 percent) corresponds to a 3.2 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for August (55.7 percent) is annualized, it corresponds to a 4.2 percent increase in real GDP annually.”
THE LAST 12 MONTHS
Month PMI™ Month PMI™
Aug 2013 55.7 Feb 2013 54.2
Jul 2013 55.4 Jan 2013 53.1
Jun 2013 50.9 Dec 2012 50.2
May 2013 49.0 Nov 2012 49.9
Apr 2013 50.7 Oct 2012 51.7
Mar 2013 51.3 Sep 2012 51.6
Average for 12 months – 52.0
High – 55.7
Low – 49.0

New Orders
ISM’s New Orders Index registered 63.2 percent in August, an increase of 4.9 percentage points when compared to the July reading of 58.3 percent. This represents growth in new orders for the third consecutive month, and is also the highest reading for the index since April 2011, when the index registered 63.8 percent. A New Orders Index above 52.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The 12 industries reporting growth in new orders in August — listed in order — are: Textile Mills; Wood Products; Nonmetallic Mineral Products; Computer & Electronic Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Chemical Products; Fabricated Metal Products; Transportation Equipment; and Paper Products. The only industry reporting a decrease in new orders during August is Miscellaneous Manufacturing.
New
Orders %
Better %
Same %
Worse
Net
Index
Aug 2013 33 52 15 +18 63.2
Jul 2013 29 49 22 +7 58.3
Jun 2013 30 49 21 +9 51.9
May 2013 28 50 22 +6 48.8

Production
ISM’s Production Index registered 62.4 percent in August, which is a decrease of 2.6 percentage points when compared to the 65 percent reported in July. This month’s reading indicates growth in production for the third consecutive month. An index above 51.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The 15 industries reporting growth in production during the month of August — listed in order — are: Textile Mills; Electrical Equipment, Appliances & Components; Wood Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Primary Metals; Printing & Related Support Activities; Computer & Electronic Products; Paper Products; Fabricated Metal Products; Furniture & Related Products; Chemical Products; Machinery; and Transportation Equipment. The only industry reporting a decrease in production in August is Miscellaneous Manufacturing.

Production %
Better %
Same %
Worse
Net
Index
Aug 2013 33 54 13 +20 62.4
Jul 2013 30 55 15 +15 65.0
Jun 2013 28 55 17 +11 53.4
May 2013 26 57 17 +9 48.6

Employment
ISM’s Employment Index registered 53.3 percent in August, which is 1.1 percentage points lower than the 54.4 percent reported in July. This month’s reading indicates expansion in employment for the second consecutive month. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, seven reported growth in employment in August in the following order: Wood Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Furniture & Related Products; Fabricated Metal Products; and Electrical Equipment, Appliances & Components. The four industries reporting a decrease in employment in August are: Apparel, Leather & Allied Products; Primary Metals; Chemical Products; and Miscellaneous Manufacturing. Seven industries reported no change in employment in August compared to July.

Employment %
Higher %
Same %
Lower
Net
Index
Aug 2013 22 63 15 +7 53.3
Jul 2013 21 67 12 +9 54.4
Jun 2013 19 65 16 +3 48.7
May 2013 22 60 18 +4 50.1

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations slowed in August at a slightly faster rate relative to July as the Supplier Deliveries Index registered 52.3 percent. This month’s reading is 0.2 percentage point higher than the 52.1 percent reported in July. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The eight industries reporting slower supplier deliveries in August — listed in order — are: Textile Mills; Wood Products; Primary Metals; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage & Tobacco Products; Machinery; and Chemical Products. The three industries reporting faster supplier deliveries in August are: Plastics & Rubber Products; Paper Products; and Computer & Electronic Products. Seven industries reported no change in supplier deliveries in August compared to July.
Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Aug 2013 12 81 7 +5 52.3
Jul 2013 11 85 4 +7 52.1
Jun 2013 9 84 7 +2 50.0
May 2013 8 85 7 +1 48.7

Inventories*
The Inventories Index registered 47.5 percent in August, which is 0.5 percentage point higher than the 47 percent reported in July. This month’s reading indicates that respondents are reporting inventories contracted in August for the second consecutive month. For the first eight months of 2013, inventories of raw materials have registered in a well-managed range from a high of 51.5 percent in February to a low of 46.5 percent in April. An Inventories Index greater than 42.7 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 five industries reporting higher inventories in August are: Apparel, Leather & Allied Products; Computer & Electronic Products; Transportation Equipment; Electrical Equipment, Appliances & Components; and Machinery. The nine industries reporting decreases in inventories in August — listed in order — are: Wood Products; Textile Mills; Plastics & Rubber Products; Fabricated Metal Products; Primary Metals; Paper Products; Furniture & Related Products; Chemical Products; and Miscellaneous Manufacturing.

Inventories %
Higher %
Same %
Lower
Net
Index
Aug 2013 16 63 21 -5 47.5
Jul 2013 15 64 21 -6 47.0
Jun 2013 19 63 18 +1 50.5
May 2013 20 58 22 -2 49.0

Customers’ Inventories*
The ISM Customers’ Inventories Index registered 42.5 percent in August, which is 5 percentage points lower than in July when the index registered 47.5 percent. This month’s reading indicates that customers’ inventories are considered too low, and significantly lower than reported in July. Customers’ inventories have registered at or below 50 percent for 53 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.
The only manufacturing industry reporting customers’ inventories as being too high during the month of August is Apparel, Leather & Allied Products. The 10 industries reporting customers’ inventories as too low during August — listed in order — are: Textile Mills; Primary Metals; Miscellaneous Manufacturing; Transportation Equipment; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Machinery; Computer & Electronic Products; Fabricated Metal Products; and Plastics & Rubber Products. Seven industries reported no change in customers’ inventories in August compared to July.
Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Aug 2013 66 9 67 24 -15 42.5
Jul 2013 67 12 71 17 -5 47.5
Jun 2013 66 10 70 20 -10 45.0
May 2013 70 14 64 22 -8 46.0

Prices*
The ISM Prices Index registered 54 percent in August, which is an increase of 5 percentage points compared to the July reading of 49 percent. The Prices Index has alternated between price increases and price decreases for the last four months, with August indicating an increase in the price of raw materials. In August, 21 percent of respondents reported paying higher prices, 13 percent reported paying lower prices, and 66 percent of supply executives reported paying the same prices as in July. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, nine reported paying increased prices during the month of August in the following order: Textile Mills; Wood Products; Apparel, Leather & Allied Products; Fabricated Metal Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Chemical Products; Machinery; and Computer & Electronic Products. The six industries reporting paying lower prices during August — listed in order — are: Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Paper Products; Transportation Equipment; Printing & Related Support Activities; and Food, Beverage & Tobacco Products.

Prices %
Higher %
Same %
Lower
Net
Index
Aug 2013 21 66 13 +8 54.0
Jul 2013 20 58 22 -2 49.0
Jun 2013 20 65 15 +5 52.5
May 2013 19 61 20 -1 49.5

Backlog of Orders*
ISM’s Backlog of Orders Index registered 46.5 percent in August, which is 1.5 percentage points higher than the 45 percent reported in July. This is the fourth consecutive month of contracting order backlogs. Of the 85 percent of respondents who reported their backlog of orders, 16 percent reported greater backlogs, 23 percent reported smaller backlogs, and 61 percent reported no change from July.
The four industries reporting increased order backlogs in August are: Apparel, Leather & Allied Products; Computer & Electronic Products; Furniture & Related Products; and Machinery. The eight industries reporting decreases in order backlogs during August — listed in order — are: Primary Metals; Plastics & Rubber Products; Miscellaneous Manufacturing; Fabricated Metal Products; Chemical Products; Transportation Equipment; Paper Products; and Food, Beverage & Tobacco Products. Six industries reported no change in order backlogs in August compared to July.
Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Aug 2013 85 16 61 23 -7 46.5
Jul 2013 86 15 60 25 -10 45.0
Jun 2013 84 17 59 24 -7 46.5
May 2013 82 23 50 27 -4 48.0

New Export Orders*
ISM’s New Export Orders Index registered 55.5 percent in August, which is 2 percentage points higher than the 53.5 percent reported in July. This month’s reading represents the ninth consecutive month of growth in new export orders.
The eight industries reporting growth in new export orders in August — listed in order — are: Wood Products; Apparel, Leather & Allied Products; Fabricated Metal Products; Petroleum & Coal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; and Chemical Products. The four industries reporting a decrease in new export orders during August are: Paper Products; Miscellaneous Manufacturing; Transportation Equipment; and Food, Beverage & Tobacco Products. Six industries reported no change in new export orders in August compared to July.
New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Aug 2013 74 17 77 6 +11 55.5
Jul 2013 75 15 77 8 +7 53.5
Jun 2013 74 15 79 6 +9 54.5
May 2013 76 16 70 14 +2 51.0

Imports*
ISM’s Imports Index registered 58 percent in August, which is 0.5 percentage point higher than the 57.5 percent reported in July. August’s reading reflects the highest level of imports since April 2010, when the reading was also 58 percent. This month’s reading also represents the ninth consecutive month that the Imports Index has registered at or above 50 percent.
The 10 industries reporting growth in imports during the month of August — listed in order — are: Wood Products; Primary Metals; Computer & Electronic Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Machinery; Furniture & Related Products; Chemical Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. The only industry reporting a decrease in imports during August is Apparel, Leather & Allied Products. Seven industries reported no change in imports in August compared to July.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Aug 2013 77 21 74 5 +16 58.0
Jul 2013 77 22 71 7 +15 57.5
Jun 2013 76 20 72 8 +12 56.0
May 2013 75 16 77 7 +9 54.5

* The Inventories, 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 increased 3 days to 124 days. Average lead time for Production Materials decreased 4 days to 59 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies decreased 1 day to 26 days.
Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Aug 2013 28 4 15 13 24 16 124
Jul 2013 29 3 13 15 26 14 121
Jun 2013 28 3 12 14 29 14 125
May 2013 27 5 10 19 23 16 125

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Aug 2013 16 37 21 20 3 3 59
Jul 2013 18 33 21 20 4 4 63
Jun 2013 16 36 23 18 4 3 60
May 2013 17 34 26 15 4 4 62

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Aug 2013 45 39 11 4 1 0 26
Jul 2013 44 37 13 5 1 0 27
Jun 2013 46 38 12 3 1 0 25
May 2013 43 40 13 3 1 0 26

About this Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).
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 (PMI™, New Orders, Production, Employment and Supplier Deliveries) 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 supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The 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 PMI™ reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI™ in excess of 42.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.2 percent, it is generally declining. The distance from 50 percent or 42.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.
The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, the first supply institute in the world. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM Report On Business® is posted on ISM’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM Report On Business® featuring the September 2013 data will be released at 10:00 a.m. (ET) on Tuesday, October 1, 2013.

July 2013 Manufacturing ISM Report On Business® PMI™ at 55.4%

New Orders, Production and Employment Growing
Inventories Contracting
Supplier Deliveries Slowing

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in July for the second consecutive month, and the overall economy grew for the 50th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI™ registered 55.4 percent, an increase of 4.5 percentage points from June’s reading of 50.9 percent. June’s PMI™ reading, the highest of the year, indicates expansion in the manufacturing sector for the second consecutive month. The New Orders Index increased in July by 6.4 percentage points to 58.3 percent, and the Production Index increased by 11.6 percentage points to 65 percent. The Employment Index registered 54.4 percent, an increase of 5.7 percentage points compared to June’s reading of 48.7 percent. The Prices Index registered 49 percent, decreasing 3.5 percentage points from June, indicating that overall raw materials prices decreased from last month. Comments from the panel generally indicate stable demand and slowly improving business conditions.”
Of the 18 manufacturing industries, 13 are reporting growth in July in the following order: Furniture & Related Products; Textile Mills; Printing & Related Support Activities; Paper Products; Wood Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Food, Beverage & Tobacco Products; Primary Metals; Transportation Equipment; Chemical Products; and Fabricated Metal Products. The four industries reporting contraction in July are: Plastics & Rubber Products; Apparel, Leather & Allied Products; Machinery; and Miscellaneous Manufacturing.
WHAT RESPONDENTS ARE SAYING …
 “Business conditions remain stable, possibly improving somewhat in future months.” (Miscellaneous Manufacturing)
 “Housing market continues to improve, leading to increased demand in product.” (Electrical Equipment, Appliances & Components)
 “Overall conditions remain steady and slightly above prior year.” (Paper Products)
 “Sales are holding steady. Business is good.” (Furniture & Related Products)
 “Business is slow compared to previous years.” (Computer & Electronic Products)
 “First half [of 2013] is better than last year — steady, slow improvement.” (Printing & Related Support Activities)
 “Leading indicators continue to show stagnant-to-gradual improvement, and sales across the board continue to be flat.” (Machinery)
 “Economy continues to be relatively flat. Growth in China is holding. Europe staying at a low level, and U.S. just flat.” (Transportation Equipment)
 “We see gluten-free industry to be strong and it continues to grow. We also see the need for capacity in blending operations.” (Food, Beverage & Tobacco Products)
 “Business remains flat. Looking for some seasonal bump as we come to the beginning of our ‘busy’ time.” (Chemical Products)
MANUFACTURING AT A GLANCE
JULY 2013

Index Series
Index
Jul Series
Index
Jun Percentage
Point
Change

Direction Rate
of
Change
Trend*
(Months)
PMI™ 55.4 50.9 +4.5 Growing Faster 2
New Orders 58.3 51.9 +6.4 Growing Faster 2
Production 65.0 53.4 +11.6 Growing Faster 2
Employment 54.4 48.7 +5.7 Growing From Contracting 1
Supplier Deliveries 52.1 50.0 +2.1 Slowing From Unchanged 1
Inventories 47.0 50.5 -3.5 Contracting From Growing 1
Customers’ Inventories 47.5 45.0 +2.5 Too Low Slower 20
Prices 49.0 52.5 -3.5 Decreasing From Increasing 1
Backlog of Orders 45.0 46.5 -1.5 Contracting Faster 3
Exports 53.5 54.5 -1.0 Growing Slower 8
Imports 57.5 56.0 +1.5 Growing Faster 6

OVERALL ECONOMY Growing Faster 50
Manufacturing Sector Growing Faster 2
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Caustic Soda (4); Corrugated Boxes (12); Corrugated Packaging (3); Oil; Oil Based Products; Plastic Resin; Polypropylene (2)*; Stainless Steel; Steel*; and Steel — Hot Rolled.
Commodities Down in Price
Aluminum; Copper; Natural Gas; Polypropylene (3)*; Steel (4)*; and Sugar (3).
Commodities in Short Supply
Fabricated Parts is the only commodity listed in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.
*Reported as both up and down in price.

________________________________________
JULY 2013 MANUFACTURING INDEX SUMMARIES
________________________________________
PMI™
Manufacturing expanded in July as the PMI™ registered 55.4 percent, an increase of 4.5 percentage points when compared to June’s reading of 50.9 percent. July’s reading of 55.4 percent reflects the sixth month of growth, and the highest overall PMI™ reading, in the first seven months of 2013. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the July PMI™ indicates growth for the 50th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the second consecutive month. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through July (52.1 percent) corresponds to a 3.1 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for July (55.4 percent) is annualized, it corresponds to a 4.1 percent increase in real GDP annually.”
THE LAST 12 MONTHS
Month PMI™ Month PMI™
Jul 2013 55.4 Jan 2013 53.1
Jun 2013 50.9 Dec 2012 50.2
May 2013 49.0 Nov 2012 49.9
Apr 2013 50.7 Oct 2012 51.7
Mar 2013 51.3 Sep 2012 51.6
Feb 2013 54.2 Aug 2012 50.7
Average for 12 months – 51.6
High – 55.4
Low – 49.0

New Orders
ISM’s New Orders Index registered 58.3 percent in July, an increase of 6.4 percentage points when compared to the June reading of 51.9 percent. This represents growth in new orders for the second consecutive month, and is also the highest reading for the index since April 2011, when the index registered 63.8 percent. A New Orders Index above 52.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The nine industries reporting growth in new orders in July — listed in order — are: Textile Mills; Printing & Related Support Activities; Nonmetallic Mineral Products; Furniture & Related Products; Paper Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Fabricated Metal Products. The five industries reporting a decrease in new orders during July are: Machinery; Plastics & Rubber Products; Primary Metals; Petroleum & Coal Products; and Miscellaneous Manufacturing.
New
Orders %
Better %
Same %
Worse
Net
Index
Jul 2013 29 49 22 +7 58.3
Jun 2013 30 49 21 +9 51.9
May 2013 28 50 22 +6 48.8
Apr 2013 34 46 20 +14 52.3

Production
ISM’s Production Index registered 65 percent in July, which is an increase of 11.6 percentage points when compared to the 53.4 percent reported in June. This month’s reading indicates growth in production for the second consecutive month, and is the highest reading since May 2004, when the index registered 65.3 percent. An index above 51.2 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.
The 13 industries reporting growth in production during the month of July — listed in order — are: Textile Mills; Paper Products; Wood Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Furniture & Related Products; Petroleum & Coal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Primary Metals; Electrical Equipment, Appliances & Components; and Fabricated Metal Products. The two industries reporting a decrease in production in July are: Chemical Products; and Machinery.

Production %
Better %
Same %
Worse
Net
Index
Jul 2013 30 55 15 +15 65.0
Jun 2013 28 55 17 +11 53.4
May 2013 26 57 17 +9 48.6
Apr 2013 33 53 14 +19 53.5

Employment
ISM’s Employment Index registered 54.4 percent in July, which is 5.7 percentage points higher than the 48.7 percent reported in June. This month’s reading indicates a return to expansion in employment, following only two months of contraction in the past 47 months. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, nine reported growth in employment in July in the following order: Furniture & Related Products; Wood Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Primary Metals; Fabricated Metal Products; Paper Products; and Machinery. The four industries reporting a decrease in employment in July are: Apparel, Leather & Allied Products; Chemical Products; Transportation Equipment; and Computer & Electronic Products.

Employment %
Higher %
Same %
Lower
Net
Index
Jul 2013 21 67 12 +9 54.4
Jun 2013 19 65 16 +3 48.7
May 2013 22 60 18 +4 50.1
Apr 2013 26 57 17 +9 50.2

Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was slower in July relative to June as the Supplier Deliveries Index registered 52.1 percent. This month’s reading is 2.1 percentage points higher than the 50 percent reported in June. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.
The six industries reporting slower supplier deliveries in July — listed in order — are: Electrical Equipment, Appliances & Components; Furniture & Related Products; Computer & Electronic Products; Chemical Products; Machinery; and Fabricated Metal Products. The only industry reporting faster supplier deliveries in July is Food, Beverage & Tobacco Products. Eleven industries reported no change in supplier deliveries in July compared to June.
Supplier
Deliveries %
Slower %
Same %
Faster
Net
Index
Jul 2013 11 85 4 +7 52.1
Jun 2013 9 84 7 +2 50.0
May 2013 8 85 7 +1 48.7
Apr 2013 12 81 7 +5 50.9

Inventories*
The Inventories Index registered 47 percent in July, which is 3.5 percentage points lower than the 50.5 percent reported in June. This month’s reading indicates that respondents are reporting inventories contracted in July, following one month of growth. For the first seven months of 2013, inventories of raw materials have registered in a well-managed range from a high of 51.5 percent in February to a low of 46.5 percent in April. An Inventories Index greater than 42.7 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 five industries reporting higher inventories in July are: Transportation Equipment; Paper Products; Furniture & Related Products; Chemical Products; and Computer & Electronic Products. The seven industries reporting decreases in inventories in July — listed in order — are: Plastics & Rubber Products; Miscellaneous Manufacturing; Machinery; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; and Food, Beverage & Tobacco Products. Six industries reported no change in inventories in July compared to June.

Inventories %
Higher %
Same %
Lower
Net
Index
Jul 2013 15 64 21 -6 47.0
Jun 2013 19 63 18 +1 50.5
May 2013 20 58 22 -2 49.0
Apr 2013 18 57 25 -7 46.5

Customers’ Inventories*
The ISM Customers’ Inventories Index registered 47.5 percent in July, which is 2.5 percentage points higher than in June when the index registered 45 percent. This month’s reading indicates that customers’ inventories are considered too low, but higher than reported in June. Customers’ inventories have registered at or below 50 percent for 52 consecutive months. A reading below 50 percent indicates customers’ inventories are considered too low.
The five manufacturing industries reporting customers’ inventories as being too high during the month of July are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Chemical Products; and Fabricated Metal Products. The nine industries reporting customers’ inventories as too low during July — listed in order — are: Plastics & Rubber Products; Textile Mills; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products.
Customers’
Inventories %
Reporting %Too
High %About
Right %Too
Low
Net
Index
Jul 2013 67 12 71 17 -5 47.5
Jun 2013 66 10 70 20 -10 45.0
May 2013 70 14 64 22 -8 46.0
Apr 2013 71 11 67 22 -11 44.5

Prices*
The ISM Prices Index registered 49 percent in July, which is a decrease of 3.5 percentage points compared to the June reading of 52.5 percent. This indicates that raw materials prices decreased in July, as they did in May, while the other five months of 2013 registered price readings at or above 50 percent. In July, 20 percent of respondents reported paying higher prices, 22 percent reported paying lower prices, and 58 percent of supply executives reported paying the same prices as in June. A Prices Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
Of the 18 manufacturing industries, six reported paying increased prices during the month of July in the following order: Textile Mills; Furniture & Related Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Chemical Products; and Machinery. The eight industries reporting paying lower prices during July — listed in order — are: Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Primary Metals; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; Fabricated Metal Products; and Transportation Equipment.

Prices %
Higher %
Same %
Lower
Net
Index
Jul 2013 20 58 22 -2 49.0
Jun 2013 20 65 15 +5 52.5
May 2013 19 61 20 -1 49.5
Apr 2013 15 70 15 0 50.0

Backlog of Orders*
ISM’s Backlog of Orders Index registered 45 percent in July, which is 1.5 percentage points lower than the 46.5 percent reported in June. This is the third consecutive month of contracting order backlogs. Of the 86 percent of respondents who reported their backlog of orders, 15 percent reported greater backlogs, 25 percent reported smaller backlogs, and 60 percent reported no change from June.
The four industries reporting increased order backlogs in July are: Textile Mills; Furniture & Related Products; Plastics & Rubber Products; and Computer & Electronic Products. The 10 industries reporting decreases in order backlogs during July — listed in order — are: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Primary Metals; Fabricated Metal Products; Machinery; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Transportation Equipment; Food, Beverage & Tobacco Products; and Chemical Products.
Backlog of
Orders %
Reporting %
Greater %
Same %
Less
Net
Index
Jul 2013 86 15 60 25 -10 45.0
Jun 2013 84 17 59 24 -7 46.5
May 2013 82 23 50 27 -4 48.0
Apr 2013 85 25 56 19 +6 53.0

New Export Orders*
ISM’s New Export Orders Index registered 53.5 percent in July, which is 1 percentage point lower than the 54.5 percent reported in June. This month’s reading represents the eighth consecutive month of growth in new export orders, and follows six consecutive months of contraction dating back to June 2012.
The nine industries reporting growth in new export orders in July — listed in order — are: Miscellaneous Manufacturing; Furniture & Related Products; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Chemical Products; and Machinery. The four industries reporting a decrease in new export orders during July are: Wood Products; Apparel, Leather & Allied Products; Transportation Equipment; and Paper Products.
New Export
Orders %
Reporting %
Higher %
Same %
Lower
Net
Index
Jul 2013 75 15 77 8 +7 53.5
Jun 2013 74 15 79 6 +9 54.5
May 2013 76 16 70 14 +2 51.0
Apr 2013 75 18 72 10 +8 54.0

Imports*
ISM’s Imports Index registered 57.5 percent in July, which is 1.5 percentage points higher than the 56 percent reported in June. This month’s reading represents the eighth consecutive month that the Imports Index has registered at or above 50 percent.
The 11 industries reporting growth in imports during the month of July — listed in order — are: Fabricated Metal Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Paper Products; Machinery; Transportation Equipment; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; and Furniture & Related Products. The two industries reporting a decrease in imports during July are: Primary Metals; and Apparel, Leather & Allied Products.

Imports %
Reporting %
Higher %
Same %
Lower
Net
Index
Jul 2013 77 22 71 7 +15 57.5
Jun 2013 76 20 72 8 +12 56.0
May 2013 75 16 77 7 +9 54.5
Apr 2013 76 19 72 9 +10 55.0

* The Inventories, 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 decreased 4 days to 121 days. Average lead time for Production Materials increased 3 days to 63 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 2 days to 27 days.
Percent Reporting

Capital
Expenditures Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jul 2013 29 3 13 15 26 14 121
Jun 2013 28 3 12 14 29 14 125
May 2013 27 5 10 19 23 16 125
Apr 2013 26 4 13 16 28 13 122

Production
Materials Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jul 2013 18 33 21 20 4 4 63
Jun 2013 16 36 23 18 4 3 60
May 2013 17 34 26 15 4 4 62
Apr 2013 18 30 33 13 3 3 58

MRO
Supplies Hand-
to-
Mouth
30
Days
60
Days
90
Days
6
Months
1
Year+
Average
Days
Jul 2013 44 37 13 5 1 0 27
Jun 2013 46 38 12 3 1 0 25
May 2013 43 40 13 3 1 0 26
Apr 2013 43 40 13 4 0 0 26

About this Report
The data presented herein is obtained from a survey of manufacturing supply managers 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. Use of the data is in the public domain and 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. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: 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).
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 (PMI™, New Orders, Production, Employment and Supplier Deliveries) 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 supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The 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 PMI™ reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI™ in excess of 42.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.2 percent, it is generally declining. The distance from 50 percent or 42.2 percent is indicative of the strength 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 ONLY report on information for the current month. 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 in order 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 Production Materials; Capital Expenditures; 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.
The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, the first supply institute in the world. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. ISM’s mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Manufacturing ISM Report On Business® is posted on ISM’s website at http://www.ism.ws on the first business day of every month after 10:10 a.m. (ET).
The next Manufacturing ISM Report On Business® featuring the August 2013 data will be released at 10:00 a.m. (ET) on Tuesday, September 3, 2013.

June 2013 Manufacturing ISM Report On Business®PMI™ at 50.9