[MARKETPU LS E]
The Backlog of Orders Index registered 53.5 percent in
May, which was an increase of 4 percentage points from
April’s reading of 49.5 percent.
The Inventories Index also saw growth. It registered
51.5 percent in May, which is up two percentage points
from 49.5 percent in April.
“Inventories these days, through thick and thin and
any kind of environment, float up and down a few points
around the fifty mark,” says Holcomb. “It all means that
inventories are well-balanced and have the right amount
of materials to satisfy these new orders and the backlog
of orders as well. It’s in a nice range at this time.”
Exports, Imports and Prices
ISM’s Exports Index, which refers to the exporting of
finished products, registered at 50 percent in May.
Holcomb says, “I’m not at all unhappy with this number,
because it is going to take a little longer for the price of
the dollar to sink in and for international customers to
adjust to it.”
The Imports Index, which refers to the importing of
raw materials to feed manufacturing, registered at 55
percent in May, which is 1 percentage point above the
54 percent reported in April. This could be due in part to
the price of the dollar overseas.
The ISM Prices Index registered at 49.5 percent in
May. This is an increase of 9 percentage points from
April’s reading of 40. 5 percent, which indicates a decrease in raw materials prices for the seventh consecutive
month. May’s prices are still below fifty; this means that
they are still decreasing but only by a bit when compared
to the past month.
According to Holcomb, the 9 percentage point change
is a reflection of how buyers of raw materials are behaving.
“Buyers are holding out and dragging their feet to buy
new raw materials, because they are waiting for prices to
fall even more or plateau,” says Holcomb. “What they’re
now seeing is that we’ve been in the lower price area for
several months, and now it is starting to turn back up.
The plus nine is a catch-up with respect to the last few
months. They feel prices are settling out and now will
start to increase.”
The Employment Index saw an increase of 3. 4 percentage
points from 48.3 in April to 51.7 in May. Notably, April’s
employment was a 1.7 percentage point decrease from
the 50 percent reported in March — this reading was the
lowest since September 2009.
The increase in the Employment Index is a leading
indicator within the manufacturing sector, and Holcomb
thinks it is a particularly good sign for manufacturing.
“The high employment index comes off of a month of
contraction, which we hadn’t seen in a long time, said
Holcomb. “When our manufacturers add to their employment ranks, it generally means that they’re seeing good,
strong order books for the next few weeks or months.”
For more information on the Institute for Supply Management, visit www.ism.ws.
www.inddist.com July/August 2015 / INDUSTRIAL DISTRIBUTION 13
CALL TOLL-FREE 800.231.7116 • SALES@TEXCELRUBBER.COM
Texcel processes your order correctly the first time, every
time. If we make a mistake, you’ll receive 5% off your next
order. THAT’S THE TEXCEL GUARANTEE.
Industrial Rubber and Plastic Hose • Industrial Sheet Rubber
Skirtboard Products • Fittings and Assemblies