ISM New Orders, Production Indexes both indicate growth

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Updated Dec 6, 2011

Economic activity in the manufacturing sector expanded in November for the 28th consecutive month, and the overall economy grew for the 30th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business issued Thursday, Dec. 1. The PMI registered 52.7 percent, an increase of 1.9 percentage points from October’s reading of 50.8 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding.

ISM’s New Orders Index registered 56.7 percent in November, which is an increase of 4.3 percentage points when compared to the October reading of 52.4 percent, and represents a continuation of growth for the second 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.

ISM’s Production Index registered 56.6 percent in November, which is an increase of 6.5 percentage points when compared to the October reading of 50.1 percent. This indicates growth for the third consecutive month after just one month of contraction. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

“Respondents cite continuing concerns about the general economic environment, government regulations and European financial conditions, but are cautiously more optimistic about the next few months based on lower raw materials pricing and favorable levels of new orders,” said Bradley Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

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