Production

ISM's Production Index is 63.1 percent in September, 7.2 percentage points higher than the 55.9 percent reported in August. September is the 29th consecutive month of growth in the index. An index above 50 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. Of the industries reporting in September, 15 registered growth: Tobacco; Paper; Electronic Components & Equipment; Apparel; Instruments & Photographic Equipment; Wood & Wood Products; Chemicals; Primary Metals; Food; Textiles; Transportation & Equipment; Industrial & Commercial Equipment & Computers; Furniture; Printing & Publishing; and Fabricated Metals.

Employment

ISM's Employment Index registered growth in September for the third consecutive month. The index registered 53.1 percent in September compared to 52.6 percent in August, an increase of 0.5 percentage point. An Employment Index above 48.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. The nine industries reporting growth in employment during September are: Furniture; Instruments & Photographic Equipment; Miscellaneous*; Electronic Components & Equipment; Transportation & Equipment; Wood & Wood Products; Food; Primary Metals; and Fabricated Metals.

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower for the 27th consecutive month in September. ISM's Supplier Deliveries Index for September registered 59.3 percent, an increase of 8.8 percentage points when compared to August's reading of 50.5 percent. A reading above 50 percent indicates slower deliveries. The 12 industries reporting slower supplier deliveries in September are: Textiles; Rubber & Plastic Products; Chemicals; Wood & Wood Products; Furniture; Paper; Fabricated Metals; Food; Primary Metals; Industrial & Commercial Equipment & Computers; Transportation & Equipment; and Printing & Publishing.

Inventories

Manufacturers' inventories declined in September for the sixth consecutive month as ISM's Inventories Index registered 49.6 percent, indicating a faster rate of liquidation when compared to August. An Inventories Index greater than 42.3 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA) figures on overall manufacturing inventories (in chained 2000 dollars). The five industries reporting higher inventories in September are: Rubber & Plastic Products; Paper; Transportation & Equipment; Industrial & Commercial Equipment & Computers; and Printing & Publishing.

Customers' Inventories**

The September Customers' Inventories Index is at 44.5 percent, 2 percentage points lower than the 46.5 percent reported in August. Respondents indicate that their customers do not have sufficient inventories on hand (inventories are too low) at this time. This is the 52nd consecutive month that the index has registered below 50 percent. Four industries reported higher customers' inventories during September and they are: Furniture; Paper; Chemicals; and Rubber & Plastic Products.

Prices**

The ISM's Prices Index jumped again in September as the Prices Index rose to 78 percent, up from 62.5 percent in August. September's jump of 15.5 percentage points follows a jump of 14 percentage points from July to August. In September, 60 percent of supply executives reported paying higher prices and 4 percent reported paying lower prices, while 36 percent reported that prices were unchanged from the preceding month.
A Prices Index above 47.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices. In September, 18 industries reported paying higher prices: Tobacco; Petroleum; Glass, Stone & Aggregate; Primary Metals; Chemicals; Rubber & Plastic Products; Fabricated Metals; Paper; Transportation & Equipment; Food; Apparel; Printing & Publishing; Industrial & Commercial Equipment & Computers; Instruments & Photographic Equipment; Wood & Wood Products; Electronic Components & Equipment; Textiles; and Furniture.

Backlog of Orders**

ISM's Backlog of Orders Index registered 55 percent, indicating manufacturers' backlogs in September are growing when compared to August. This represents a 4.5 percentage point increase compared to the 50.5 percent reported in August. Of the 85 percent of respondents who report their backlog of orders, 28 percent reported greater backlogs, 18 percent reported smaller backlogs, and 54 percent reported no change from August. The 11 industries reporting an increase in order backlogs during the month are: Wood & Wood Products; Apparel; Paper; Electronic Components & Equipment; Printing & Publishing; Primary Metals; Food; Fabricated Metals; Furniture; Chemicals; and Rubber & Plastic Products.

New Export Orders

ISM's New Export Orders Index for September registered 56.9 percent, an increase of 3.6 percentage points when compared to August's index of 53.3 percent. This is the 45th consecutive month of growth in export orders. The 11 industries reporting growth in new export orders in September are: Electronic Components & Equipment; Instruments & Photographic Equipment; Textiles; Primary Metals; Food; Furniture; Paper; Industrial & Commercial Equipment & Computers; Fabricated Metals; Transportation & Equipment; and Chemicals.

Imports

Imports of materials by manufacturers grew during September as the Imports Index registered 53.4 percent. The index also registered 53.4 percent in August, indicating that imports are growing compared to last month but at the same rate. The 10 industries reporting growth in import activity for September are: Wood & Wood Products; Electronic Components & Equipment; Miscellaneous*; Transportation & Equipment; Furniture; Primary Metals; Fabricated Metals; Paper; Instruments & Photographic Equipment; and Chemicals.

Buying Policy

Average commitment leadtime for Capital Expenditures decreased 13 days to 106 days. Average leadtime for Production Materials decreased 4 days to 47 days. Average leadtime for Maintenance, Repair and Operating (MRO) supplies decreased 1 day to 22 days.