The following is the un-edited press release from the Institute for Supply Management



September Manufacturing ISM Report On Business®

PMI at 59.4%

New Orders, Production Expanding

Employment Growing

Prices Increasing Significantly

Economic activity in the manufacturing sector grew in September for the 28th consecutive month, while the overall economy grew for the 47th consecutive month, say the nation's supply executives in the latestManufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. """"""""The manufacturing sector grew for the 28th consecutive month in September based on the ISM data. The PMI made a strong move to the upside as New Orders and Production rose significantly. This move was supported by slower deliveries and growing order backlogs. While energy prices and the impact from Hurricane Katrina are major concerns, the manufacturing sector has regained significant momentum.""""""""

TOP PERFORMING INDUSTRIES

The 16 industries reporting growth in September — listed in order — are: Paper; Wood & Wood Products; Electronic Components & Equipment; Apparel; Tobacco; Furniture; Chemicals; Instruments & Photographic Equipment; Transportation & Equipment; Food; Primary Metals; Textiles; Rubber & Plastic Products; Fabricated Metals; Printing & Publishing; and Industrial & Commercial Equipment & Computers.

WHAT RESPONDENTS ARE SAYING …
• """"""""Hurricane Katrina has presented some real challenges in getting raw materials, some of which are manufactured in the region and others that are transported through the port of New Orleans."""""""" (Chemicals)
• """"""""Record sales in August 2005 and increased backlog. Expect increased orders from the rebuilding."""""""" (Electronic Components & Equipment)
• """"""""Business levels remain slightly stronger than projected — both domestic and international demand."""""""" (Industrial & Commercial Equipment & Computers)
• """"""""Hurricane Katrina clean-up and reconstruction will have a huge impact on our business. Customer orders have begun to increase substantially."""""""" (Instruments & Photographic Equipment )
• """"""""Due to demand in the automotive marketplace, business conditions are very strong."""""""" (Textiles)

COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY

Commodities Up in Price
Adhesives; Aluminum (2); Aluminum Products (2); Caustic Soda (17); Chemicals (20); Copper (4); Crude Oil (2); Diesel Fuel (13); Energy (8); Freight; Fuel (2); Fuel Oil; Fuel Surcharges (3); Gasoline (3); Natural Gas (38); Oil (5); PET; Petrochemicals; Petroleum-Based Raw Materials; Plastic Resins (8); Plastics (14); Plywood; Propylene; Resins (3); Steel* (24); Transportation; and Yeast.

Commodities Down in Price
Corrugated Containers (4); Linerboard; Steel* (7); and Wheat.

Commodities in Short Supply
Castings; Fuel Oil; Hydrochloric Acid (2); Hydrogen; and Resins.
*Reported as both up and down in price.
Note: The number of consecutive months the commodity is listed is indicated after each item.

SEPTEMBER 2005 MANUFACTURING INDEX SUMMARIES

PMI

The PMI indicates that the manufacturing economy grew in September for the 28th consecutive month. The PMI for September registered 59.4 percent, an increase of 5.8 percentage points when compared to August's reading of 53.6 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI in excess of 42.7 percent, over a period of time, generally indicates an expansion of the overall economy. The September PMI indicates that both the overall economy and the manufacturing sector are growing. The past relationship between the PMI and the overall economy indicates that the average PMI for January through September (55 percent) corresponds to a 4.5 percent increase in gross domestic product (GDP) on an annual basis. In addition, if the PMI for September (59.4 percent) is annualized, it corresponds to a 6.1 percent increase in GDP annually.

New Orders

ISM's New Orders Index grew in September with a reading of 63.8 percent. The index is 7.4 percentage points higher than the 56.4 percent registered in August, and September is the 29th consecutive month the index has exceeded 50 percent. A New Orders Index above 51.1 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars). Thirteen industries reported increases during September: Paper; Apparel; Wood & Wood Products; Electronic Components & Equipment; Furniture; Food; Chemicals; Printing & Publishing; Transportation & Equipment; Rubber & Plastic Products; Primary Metals; Instruments & Photographic Equipment; and Fabricated Metals.