Since June of last year, the manufacturing sector experienced growth, according to latest ISM Manufacturing Report on Business. Industries report escalating business in correlation with the overall economy, which has been growing steadily for the past 32 months.

Though the rapid development has slowed down a bit, experts predict that it will continue moving upward. Longer leadtimes and the cost of energy have reaped some complaints, but manufacturers agree that these problems are still manageable.

The PMI (Purchasing Manager's Index) for June of 2004 settled at 61.1 percent, signaling that the economy is still expanding. This correlates with the 7.1% increase in the GDP (Gross Domestic Product) over the past six months. The following are some of the highlights of the report. To view all of the results, click on the ISM link below.

Prices
Prices went up across the board, according to all of the 20 reporting industries. The rate at which prices are climbing is has slowed 5 percentage points, holding at an index of 81%. Eight of the industries have seen prices swell for six months or more, with Natural Gas having the longest span of increase, 23 months. Soybean oil was the only product reporting a reduction in price.

Inventories
For the first time in over four years, inventories grew to some extent, just peaking over 51%. The industries with inventory growth are:
· Leather
· Instruments and photographic equipment
· Primary metals
· Rubber and plastic products
· Paper
· Miscellaneous
· Printing and publishing
· Industrial and commercial equipment and computers
· Fabricated metals
· Furniture

Employment
In spite of the 37-month contraction behind it, the eight-month stretch of rising employment continues to hold strong even though it has decreased 2.2 percentage points since May. The seventeen industries that stated an increase in employment consisted of:
· Petroleum
· Leather
· Textiles
· Instruments and photographic equipment
· Apparel
· Wood and wood products
· Electronic components and equipment
· Chemicals
· Industrial and commercial equipment and computers
· Printing and publishing
· Fabricated metals
· Primary metals
· Transportation and equipment
· Miscellaneous
· Food
· Furniture
· Rubber and plastic products

Deliveries
Deliveries have been slowing for 30 months, and June was no exception. Hovering around 68%, the Supplier's Delivery index designates somewhat sluggish deliveries. The 16 industries reporting slow deliveries are:
· Petroleum
· Apparel
· Instruments and photographic equipment
· Electronic components and equipment
· Paper
· Fabricated metals
· Industrial and commercial equipment and computers
· Wood and wood products
· Miscellaneous
· Chemicals
· Printing and publishing
· Transportation and equipment
· Food
· Rubber and plastic products
· Furniture
· Primary metals

New Orders
New orders were pouring in at an index of 60 percent. Of the twelve industries that reported a growth in new orders, there were:
· Instruments and photographic equipment
· Rubber and plastic products
· Wood and wood products
· Electronic components and equipment
· Chemicals
· Industrial and commercial equipment and computers
· Paper
· Glass, stone, and aggregate
· Fabricated metals
· Primary metals
· Transportation and equipment
· Miscellaneous

The production index fell 1.6%, resting an impressive 63.2. The industries that registered a growth in production were fourteen in number, including:
· Rubber and plastic products
· Industrial and commercial equipment and computers
· Wood and wood products
· Instruments and photographic equipment
· Fabricated Metals
· Electronic Components and equipment
· Miscellaneous
· Apparel
· Chemicals
· Paper
· Textiles
· Primary metals
· Furniture
· Transportation and equipment

How will these industries fare in the future? Stay tuned to IMT for the next monthly report.

Source:

ISM Manufacturing Report on Business
Norbert J. Ore
Institute for Supply Management, July 2004
http://www.ism.ws/ISMReport/ROB072004.htm