Inventories
Manufacturers’ inventories contracted in August as the Inventories Index registered 49.3 percent, which is 4.3 percentage points higher than the 45 percent reported in July. An Inventories Index greater than 42.4 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 seven industries reporting higher inventories in August are: Furniture & Related Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Machinery. The industries that reported decreases in August are: Petroleum & Coal Products; Plastics & Rubber Products; Paper Products; Chemical Products; Miscellaneous Manufacturing; and Transportation Equipment.
Customers’ inventories
The ISM Customers’ Inventories Index registered 54.5 percent in August, an increase of 7.5 percentage points when compared to July’s reading of 47 percent. The index indicates that respondents believe their customers’ inventories are too high at this time.
Six industries reported higher customers’ inventories during August: Furniture & Related Products; Electrical Equipment, Appliances & Components; Printing & Related Support Activities; Chemical Products; Food, Beverage & Tobacco Products; and Machinery. The industries that reported lower customers’ inventories during August are: Plastics & Rubber Products; Miscellaneous Manufacturing; Computer & Electronic Products; and Fabricated Metal Products.
Prices
The ISM Prices Index registered 77 percent in August, indicating manufacturers are paying higher prices on average when compared to July. While 60 percent of respondents reported paying higher prices and 6 percent reported paying lower prices, 34 percent of supply executives reported paying the same prices as the preceding month. A Prices Index above 47.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
In August, 17 industries reported paying higher prices: Textile Mills; Apparel, Leather & Allied Products; Wood Products; Petroleum & Coal Products; Paper Products; Miscellaneous Manufacturing; Chemical Products; Plastics & Rubber Products; Machinery; Fabricated Metal Products; Transportation Equipment; Nonmetallic Mineral Products; Computer & Electronic Products; Printing & Related Support Activities; Furniture & Related Products; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. Primary Metals is the only industry reporting paying lower prices on average in August.
Backlog of orders
ISM’s Backlog of Orders Index registered 43.5 percent in August, 0.5 percentage point higher than the 43 percent reported in July. Of the 87 percent of respondents who reported their backlog of orders, 15 percent reported greater backlogs, 28 percent reported smaller backlogs, and 57 percent reported no change from July.
The four industries reporting an increase in order backlogs in August are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The industries that reported decreases in order backlogs during August are: Nonmetallic Mineral Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Primary Metals; Wood Products; Furniture & Related Products; Transportation Equipment; and Chemical Products.
New export orders
ISM’s New Export Orders Index registered 57 percent in August, an increase of 3 percentage points when compared to July’s index of 54 percent. This is the 69th consecutive month of growth in the New Export Orders Index.
The ten industries reporting growth in new export orders in August are: Apparel, Leather & Allied Products; Paper Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Fabricated Metal Products; and Transportation Equipment. Machinery is the only industry reporting a decrease in new export orders in August.
Imports
Imports of materials by manufacturers contracted during August as the Imports Index registered 48.5 percent, 2 percentage points higher than the 46.5 percent reported in July. This is the seventh consecutive month of contraction in imports.
The six industries reporting growth in import activity for August are: Printing & Related Support Activities; Plastics & Rubber Products; Nonmetallic Mineral Products; Computer & Electronic Products; Transportation Equipment; and Machinery. The industries that reported decreases in imports during August are: Wood Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Chemical Products; and Food, Beverage & Tobacco Products.
Buying policy
Average commitment lead time for Capital Expenditures remained unchanged at 117 days. Average lead time for Production Materials increased 7 days to 55 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 2 days to 22 days.
Source: Institute for Supply Management
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