Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Contractionary number in ISM Manufacturing as we have a reading below 50. Expectations were 50.5 to 51.0 range. Nothing much good in the details either as employment and new orders (especially) stunk. We shall see after the knee jerk down if the market “embraces” the report since bad = more and longer QE.
Full report here.
“The PMI™ registered 49 percent, a decrease of 1.7 percentage points from April’s reading of 50.7 percent, indicating contraction in manufacturing for the first time since November 2012 and only the second time since July 2009. This month’s PMI™ reading is at its lowest level since June 2009, when it registered 45.8 percent. The New Orders Index decreased in May by 3.5 percentage points to 48.8 percent, and the Production Index decreased by 4.9 percentage points to 48.6 percent. The Employment Index registered 50.1 percent, a slight decrease of 0.1 percentage point compared to April’s reading of 50.2 percent. The Prices Index registered 49.5 percent, decreasing 0.5 percentage point from April, indicating that overall raw materials prices decreased from last month. Several comments from the panel indicate a flattening or softening in demand due to a sluggish economy, both domestically and globally.”
WHAT RESPONDENTS ARE SAYING …
- “Customers are anticipating resin price decreases and holding back orders.” (Plastics & Rubber Products)
- “Slight uptick in overall business but not substantial.” (Textile Mills)
- “Government spending has tightened, which has moved out program awards and caused some reduction in force.” (Computer & Electronic Products)
- “Market outlook is relatively flat, with some promise of raw materials inflation relaxing.” (Electrical Equipment, Appliances & Components)
- “General economy seems sluggish and pensive. Buyers are not buying much beyond lead times.” (Fabricated Metal Products)
- “Downturn in European and Chinese markets is having a negative effect on our business.” (Machinery)
- “We are having a difficult time hiring skilled employees.” (Transportation Equipment)
- “Business continues to increase, but over the past 20 days we have seen the trend flatten.” (Furniture & Related Products)
- “Market was holding strong until mid-month — then softened.” (Wood Products)
- “Decline in sales for FYQ2 over same period a year ago due to softer demand [in] both domestic and exports.” (Chemical Products)
| MANUFACTURING AT A GLANCE MAY 2013 |
||||||
|---|---|---|---|---|---|---|
| Index | Series Index May |
Series Index Apr |
Percentage Point Change |
Direction | Rate of Change |
Trend* (Months) |
| PMI™ | 49.0 | 50.7 | -1.7 | Contracting | From Growing | 1 |
| New Orders | 48.8 | 52.3 | -3.5 | Contracting | From Growing | 1 |
| Production | 48.6 | 53.5 | -4.9 | Contracting | From Growing | 1 |
| Employment | 50.1 | 50.2 | -0.1 | Growing | Slower | 44 |
| Supplier Deliveries | 48.7 | 50.9 | -2.2 | Faster | From Slowing | 1 |
| Inventories | 49.0 | 46.5 | +2.5 | Contracting | Slower | 3 |
| Customers’ Inventories | 46.0 | 44.5 | +1.5 | Too Low | Slower | 18 |
| Prices | 49.5 | 50.0 | -0.5 | Decreasing | From Unchanged | 1 |
| Backlog of Orders | 48.0 | 53.0 | -5.0 | Contracting | From Growing | 1 |
| Exports | 51.0 | 54.0 | -3.0 | Growing | Slower | 6 |
| Imports | 54.5 | 55.0 | -0.5 | Growing | Slower | 4 |
| OVERALL ECONOMY | Growing | Slower | 48 | |||
| Manufacturing Sector | Contracting | From Growing | 1 | |||
*Number of months moving in current direction.
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