October Manufacturing ISM Report On Business®; PMI at 50.8%; New Orders, Production and Employment Growing; Supplier Deliveries Slowing; Inventories Contracting

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 October 2011.

TEMPE, Ariz. — (BUSINESS WIRE) — November 1, 2011 — Economic activity in the manufacturing sector expanded in October for the 27th consecutive month, and the overall economy grew for the 29th 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 50.8 percent, a decrease of 0.8 percentage point from September’s reading of 51.6 percent, indicating expansion in the manufacturing sector for the 27th consecutive month. The New Orders Index increased 2.8 percentage points from September to 52.4 percent, indicating a return to growth after three months of contraction. The Prices Index, at 41 percent, dropped 15 percentage points, and is below the 50 percent mark for the first time since May 2009 when it registered 43.5 percent. Inventories decreased to 46.7 percent, which is 5.3 percentage points below the September reading of 52 percent. Comments from respondents are mixed, indicating positive relief from raw materials pricing and continuing strength in a few industries, but there is also more concern and caution about growth in this uncertain economy.”


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


  • “Starting to see some deflation on raw materials.” (Chemical Products)
  • “Overall industry volumes remain flat vs. previous month. Uncertainty in supply chain is increasing due to lower volumes vs. historical.” (Electrical Equipment, Appliances & Components)
  • “International: contraction in demand for our products is driving mitigation of excess material on order. Contract manufacturers are adjusting their resources accordingly.” (Machinery)
  • “Business is very strong, both domestically and internationally.” (Fabricated Metal Products)
  • “With metal prices declining, we are seeing some short-term forecast strength. If metal pricing increases again, this strength is expected to disappear again.” (Primary Metals)
  • “Auto industry still strong.” (Transportation Equipment)
  • “Business is slowing — not crashing — but uncertainty and caution is the order of the day.” (Plastics & Rubber Products)
  • “Retail branded business is slower than expected due to consumers continuing to move to private label- and store-brand products for price advantage. Raw material supplies are in good shape, but prices are staying stubbornly higher than expected.” (Food, Beverage & Tobacco Products)







Rate of


PMI 50.8 51.6 -0.8 Growing Slower 27
New Orders 52.4 49.6 +2.8 Growing From Contacting 1
Production 50.1 51.2 -1.1 Growing Slower 2
Employment 53.5 53.8 -0.3 Growing Slower 25
Supplier Deliveries 51.3 51.4 -0.1 Slowing Slower 29
Inventories 46.7 52.0 -5.3 Contracting From Growing 1
Customers’ Inventories 43.5 49.0 -5.5 Too Low Faster 31
Prices 41.0 56.0 -15.0 Decreasing From Increasing 1
Backlog of Orders 47.5 41.5 +6.0 Contracting Slower 5
Exports 50.0 53.5 -3.5 Unchanged From Growing 1
Imports 49.5 54.5 -5.0 Contracting From Growing 1


Manufacturing Sector

Growing Slower 29
Growing Slower 27

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