Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Good news on the ISM number, taking the market from unchanged to up 0.3% on the first reaction. Of the subindexes – new orders +3.7, employment +1.2, and prices flat. Can’t ask for much more than that. Full report here.
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Economic activity in the manufacturing sector expanded in April for the 33rd consecutive month, and the overall economygrew for the 35th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI registered 54.8 percent, an increase of 1.4 percentage points from March’s reading of 53.4 percent, indicating expansion in the manufacturing sector for the 33rd consecutive month. Sixteen of the 18 industries reflected overall growth in April, and the New Orders, Production and Employment Indexes all increased, indicating growth at faster rates than in March. The Prices Index for raw materials remained at 61 percent in April, the same rate as reported in March. Comments from the panel generally indicate stable to strong demand, with some concerns cited over increasing oil prices and European stability.”
WHAT RESPONDENTS ARE SAYING …
- “We expect our production levels to remain at the current level or increase over the next quarter.” (Chemical Products)
- “In general, demand remains strong for products, and we [are experiencing] more supply disruptions now than four to five months ago.” (Machinery)
- “The economy was off to a good start through the first quarter, but the European issues keep coming up as well as the recent disappointing jobs report. It appears that some of the early gains may be temporary.” (Fabricated Metal Products)
- “Warm weather in Midwest appears to have helped soft drink sales.” (Food, Beverage & Tobacco Products)
- “Positive increase in volume of sales and orders, and slight uptick in inventories, indicate the overall outlook remains robust through summer at least.” (Miscellaneous Manufacturing)
- “Sales are slowing.” (Computer & Electronic Products)
- “Business conditions on a national scale have a very positive outlook for the commercial metals we provide. At this point, we have outperformed each quarter’s goal and anticipate a strong finish.” (Primary Metals)
- “Strong demand [compared to] previous year.” (Plastics & Rubber Products)
- “Business indicators suggest a stronger stability in overall environment. Production and orders are stable.” (Transportation Equipment)
- “Business conditions continue to improve.” (Furniture & Related Products)
| MANUFACTURING AT A GLANCE APRIL 2012 |
||||||
|---|---|---|---|---|---|---|
| Index | Series Index Apr |
Series Index Mar |
Percentage Point Change |
Direction | Rate of Change |
Trend* (Months) |
| PMI | 54.8 | 53.4 | +1.4 | Growing | Faster | 33 |
| New Orders | 58.2 | 54.5 | +3.7 | Growing | Faster | 36 |
| Production | 61.0 | 58.3 | +2.7 | Growing | Faster | 35 |
| Employment | 57.3 | 56.1 | +1.2 | Growing | Faster | 31 |
| Supplier Deliveries | 49.2 | 48.0 | +1.2 | Faster | Slower | 3 |
| Inventories | 48.5 | 50.0 | -1.5 | Contracting | From Unchanged | 1 |
| Customers’ Inventories | 45.5 | 44.5 | +1.0 | Too Low | Faster | 5 |
| Prices | 61.0 | 61.0 | 0.0 | Increasing | Same | 4 |
| Backlog of Orders | 49.5 | 52.5 | -3.0 | Contracting | From Growing | 1 |
| Exports | 59.0 | 54.0 | +5.0 | Growing | Faster | 6 |
| Imports | 53.5 | 53.5 | 0.0 | Growing | Same | 5 |
| OVERALL ECONOMY | Growing | Faster | 35 | |||
| Manufacturing Sector | Growing | Faster | 33 | |||
*Number of months moving in current direction.
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
