Summary
The Institute for Supply Management reported earlier today that its index designed to measure the economy's manufacturing activity came in at a reading of 58.1 in November. This was down modestly from an October result of 59.1. November saw a sizable decline in the index's price component, but to a level that remains very high by historical standards and on that continues to show major expansion.
_____
* ISM's report earlier today showed that its index designed to measure the economy's manufacturing activity ("PMI") fell modestly in November, to 58.1. This compared with an October reading of 59.1.
* November's result was right on a consensus forecast that had been looking for something around 58. In November of 2004, the PMI stood at 57.6.
(NOTE: Overall index and sub-index readings above 50.0 indicate expansion; readings below 50.0 indicate contraction.)
* The prices-paid component registered a 10-point decline during November, to 74.0. Nevertheless, this remains a very high reading historically. Even after incorporating November's decline, this series stands 25.5 points or 52.6% above its recent low of 48.5, set in July of this year.
* During November, three of the PMI's more important components weakened a little, but remained strong overall. These were new orders, production and supplier deliveries. The key employment component firmed a bit. The further slowing in supplier deliveries coupled with a low customers' inventory value of 43.5 could be signaling bottlenecks and further upward price pressures.
* Some comments from ISM's "What Respondents Are Saying" section of today's report:
* "The hurricanes destroyed many trucks ... [which resulted in] extra business." (Transportation & Equipment).
* "The hurricanes along the Gulf Coast are still impacting the supply and delivery of some products and materials." (Chemicals).
* "Concerned that business will be slowing due to housing decline." (Industrial & Commercial Equipment & Computers).
* "Our production is sold out for the rest of the year. Spare parts are difficult to get due to long leadtimes." (Glass, Stone & Aggregate).
* Over the 12-month period ended November, the overall PMI registered a high of 59.4 (September 2005). Its low of 51.4 was set in May of this year. The 12-month average came in at 55.8, 2.3 points below November's result. The highest reading since January 2003 was 62.8 (occurring in January of 2004), 4.7 points or 8.1% above November's reading.
--------------------------------------------
INSTITUTE FOR SUPPLY MANAGEMENT PMI INDEX
-- TOTAL INDEX AND PRICE COMPONENT
--------------------------------------------
Respondents Reporting
Higher, Lower, or
Unchanged Prices
Month/ Overall Price ---------------------
Year Index Index Higher Lower Unch.
--------------------------------------------
11/05 58.1 74.0 53% 5% 42%
10/05 59.1 84.0 70% 2% 28%
09/05 59.4 78.0 60% 4% 36%
08/05 53.6 62.5 36% 11% 53%
07/05 56.6 48.5 24% 27% 49%
06/05 53.8 50.5 22% 21% 57%
05/05 51.4 58.0 32% 16% 52%
04/05 53.3 71.0 52% 10% 38%
03/05 55.2 73.0 51% 5% 44%
02/05 55.3 65.5 38% 7% 55%
01/05 56.4 69.0 45% 7% 48%
==========================================
12/04 57.3 72.0 52% 8% 40%
------------------------------------------
11/04 57.6 74.0 55% 7% 38%
------------------------------------------
10/04 57.5 78.5 61% 4% 35%
09/04 59.1 76.0 55% 3% 42%
08/04 59.6 81.5 67% 4% 29%
07/04 61.6 77.0 58% 4% 38%
06/04 61.2 81.0 66% 4% 30%
05/04 62.6 86.0 74% 2% 24%
04/04 62.3 88.0 77% 1% 22%
03/04 62.3 86.0 73% 1% 26%
02/04 62.1 81.5 65% 2% 33%
01/04 62.8 75.5 54% 3% 43%
==========================================
12/03 62.1 66.0 37% 5% 58%
11/03 61.3 64.0 33% 5% 62%
10/03 57.7 58.5 26% 9% 65%
09/03 55.1 56.0 21% 9% 70%
08/03 55.6 53.0 19% 13% 68%
07/03 52.5 53.0 21% 15% 64%
06/03 50.4 56.5 26% 13% 61%
05/03 49.8 51.5 21% 18% 61%
04/03 46.1 63.5 37% 10% 53%
03/03 46.4 70.0 47% 7% 46%
02/03 49.9 65.5 <------ NA ------>
01/03 52.8 57.5 <------ NA ------>
--------------------------------------------
Commodities Reported in Short Supply During November:
(NOTE: The number of consecutive months the commodity is listed is indicated after each item.)
Caustic Soda; Copper (2); Steel (2); and Sugar.
Commodities Reported Up in Price During November:
Aluminum (4); Caustic Soda (19); Chemicals (22); Copper (6); Corn Syrup/Sweeteners; Corrugated Containers*; Energy (10); Fuel Surcharges (5); Gasoline* (5); Hydrochloric Acid; LDPE; Natural Gas* (40); Oil (7); Paper (2); PET; Petroleum Products; Plastic Resins (10); Plastics (16); Polyethylene (2); Resins (5); Rubber; Steel (26); and Sugar (2).
Commodities Reported Down in Price During November:
Corrugated Containers*; Diesel Fuel; Gasoline*; Natural Gas*; and Nickel (2).
*Reported up and down in price.
On Monday (12/5), ISM will release data covering the economy's service-sector activity during November.
_____
| 