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Economic Analysis’ (BEA) figures on overall manufacturing inven-
tories (in chained 2000 dollars).
“At 50, the Inventories Index is right at the balance point — so
very much in check and I suspect that it will come down again
because there is a concerted preference to keep inventory levels
low,” explains Holcomb. “You can kind of tie inventory and
employment together in the sense that manufacturing right now
does not want to get caught short of employment or inventories,
which will impact its ability to fill orders.”
ISM’s Backlog of Orders Index registered 49.5 percent in Sep-
tember, which is 3 percentage points higher than the 46. 5 percent
reported in August. This is the fifth consecutive month of con-
tracting order backlogs. Of the 86 percent of respondents who
reported their backlog of orders, 19 percent reported greater
backlogs, 20 percent reported smaller backlogs, and 61 percent
reported no change from August.
Exports, Imports, and Prices
ISM’s New Export Orders Index registered 52 percent in September, which is 3. 5 percentage points lower than the 55.5 percent
reported in August. September’s reading reflects growth in the
level of exports relative to August, but at a moderately slower
level. This month’s reading also represents the 10th consecutive
month of growth in new export orders.
ISM’s Imports Index registered 55 percent in September, which
is 3 percentage points lower than the 58 percent reported in August. September’s reading reflects growth in the level of imports
relative to August, but at a moderately slower level. This month’s
reading also represents the 10th consecutive month that the Imports Index has registered at or above 50 percent.
“The import and export numbers just show that both are grow-
ing, but at a slower rate,” says Holcomb. “Now keep in mind that
we've been growing for 8 to 10 months in these two categories
and although they may be a little lower this month, these are still
very good numbers indicating that the global economy is working
in both directions and supporting manufacturing.”
The ISM Prices Index registered 56.5 percent in September,
which is an increase of 2. 5 percentage points compared to the
August reading of 54 percent. This month’s reading indicates an
increase in raw materials prices for the second consecutive month.
In September, 22 percent of respondents reported paying higher
prices, 9 percent reported paying lower prices, and 69 percent of
supply executives reported paying the same prices as in August. A
Prices Index above 49.7 percent, over time, is generally consistent
with an increase in the Bureau of Labor Statistics (BLS) Index of
Manufacturers Prices.
“I think the Prices Index is indifferent right now and I think it's
short-lived,” adds Holcomb. “This month our lists of commodities
that are up in price is not very long. So bottom line is, prices are
very much in check and not concerned about inflation or anything
close to it.”
Employment
ISM’s Employment Index registered 55.4 percent in September,
which is 2.1 percentage points higher than the 53.3 percent
reported in August. This month’s reading indicates expansion in
employment for the third consecutive month. An Employment Index
