The March 2010 ISM Manufacturing Survey is out and PMI came in at 59.6%.
Economic activity in the manufacturing sector expanded in March for the eighth consecutive month, and the overall economy grew for the 11th consecutive month.
This is all good and so much for the Chicago PMI being a predictor of bad tidings for the national, at least from this report. Recall that the ISM neutral point is 50. Above is growth, below is contraction.
The rate of growth as indicated by the PMI is the fastest since July 2004.
The other piece of data to note is prices. They jumped 8% in a month! No more deflation for you?
| MANUFACTURING AT A GLANCE MARCH 2010 | ||||||
|---|---|---|---|---|---|---|
|
Index |
Series Index March |
Series Index Feb. |
% Chg. |
Direction |
Rate of Change |
Trend (Mon.) |
| PMI | 59.6 | 56.5 | +3.1 | Growing | Faster | 8 |
| New Orders | 61.5 | 59.5 | +2.0 | Growing | Faster | 9 |
| Production | 61.1 | 58.4 | +2.7 | Growing | Faster | 10 |
| Employment | 55.1 | 56.1 | -1.0 | Growing | Slower | 4 |
| Supplier Deliveries | 64.9 | 61.1 | +3.8 | Slowing | Faster | 10 |
| Inventories | 55.3 | 47.3 | +8.0 | Growing | From Contracting | 1 |
| Customers' Inventories | 39.0 | 37.0 | +2.0 | Too Low | Slower | 12 |
| Prices | 75.0 | 67.0 | +8.0 | Increasing | Faster | 9 |
| Backlog of Orders | 58.0 | 61.0 | -3.0 | Growing | Slower | 3 |
| Exports | 61.5 | 56.5 | +5.0 | Growing | Faster | 9 |
| Imports | 57.0 | 56.0 | +1.0 | Growing | Faster | 7 |
| OVERALL ECONOMY | Growing | Faster | 11 | |||
| Manufacturing Sector | Growing | Faster | 8 | |||
The big news is the change in inventories. The below graph (normalized to zero), shows this is the first time inventories have increased since this recession:
Howz hiring doing? Below is the graph, normalized to zero on the ISM manufacturing hiring trend. Look at this, we have the best manufacturing survey release in 6 years yet hiring is contracting from last month? Where are these businesses hiring? China?
Below is the same metrics, except for new orders:
Here is production:
From the comments gathered from the survey, two stick out:
Business levels continue to be strong coming out of the Chinese New Year.
What does China have to do with U.S. machinery, unless they are selling to China? (yes!@)
There is a serious shortage of basic electronic components, and lead times are becoming a problem. We are also seeing dramatic price increases.
No more $300 dollar computers?
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