Manufacturing orders gaining; biggest jump in 2 quarters

Circuits Assembly, June, 2009 by Chelsey Drysdale

TEMPE, AZ -- US manufacturing activity slipped in April for the 15th consecutive month, but the rate of new orders jumped six points to its highest level since September, according to the latest poll of the nation's executives.

After six consecutive months below the 40% mark, the PMI index of manufacturing activity jumped nearly four points to 40.1%. A PMI over 41.2%, over time, generally indicates an expansion of the overall economy, said the Institute for Supply Management (ism.ws), which tracks the data.

The new orders index hit 47.2%, with the computer & electronic products segment reporting growth. The Customer Inventories Index fell, a sign stocks are being cut. The pricing index fell as well, meaning manufacturers are paying less for goods and services.

ISM spokesman Norbert Ore said, "The PMI shows a significant improvement. While this is a big step forward, there is still a large gap that must be closed before manufacturing begins to grow once again."

                      Dec.  Jan.  Feb.  Mar.  Apr.

PMI                   32.9  35.6  35.8  36.3  40.1

New orders            23.1  33.2  33.1  41.2  47.2

Production            26.3  32.1  36.3  36.4  40.4

Inventories           39.6  37.5  37.0  32.2  33.6

Customer inventories  57.0  55.5  51.0  54.0  49.5

Backlogs              23.0  29.5  31.0  35.5  40.5

Source: Institute for Supply Management, May 1, 2009

Edited by Chelsey Drysdale