Manufacturing index reaches highest level of last 13+ years
October 6, 2017 Tom Sanderson

Manufacturing index reaches highest level of last 13+ years

The Institute of Supply Management (ISM) reported that the Purchasing Managers’ Index (PMI) increased  to 60.8 in September from 58.8 in August. This was the highest PMI since May 2004. So far every month of 2017 has had a higher index than any month of 2016. After contracting in August 2016, the manufacturing sector has expanded at a strong pace.  PMI came in above expectations (58.0). The New Order Index increase by 4.3 points to 64.6. The Production Index rose by 1.2 points to 62.2. Of 18 manufacturing industries, 17 reported monthly growth in September.

After a slow start in January of 2014, PMI recovered, with a range of 54.3 to 58.1 for the balance of 2014. We did not see a reading above 53.9 in 2015, and that high mark was reached in January. In 2016, the index ranged from 48.2 (Jan) to 54.5 (Dec) but it was not a steady rise, with manufacturing contracting in February and August.

An index over 50 indicates growth while a PMI under 50 represents contraction in the manufacturing sector of the economy. The index reached a low of 32.5 in December 2008 but then recovered more quickly than most other areas of the economy.