ISM Mfg 53.1 vs 50.7 Expected « Market Montage

Best reading since April 2012 and well ahead of expectations.  Services are a larger part of the economy by far, but this one gets more of the attention.  New orders and employment both up while price gains contained – "goldilocks".  Thus far the market is holding the morning gap up.  Looks like Dow 14K is in sight today, get the Tshirts out.  Full report below.

"The PMI™ registered 53.1 percent, an increase of 2.9 percentage points from December's seasonally adjusted reading of 50.2 percent, indicating expansion in manufacturing for the second consecutive month. The New Orders Index registered 53.3 percent, an increase of 3.6 percent over December's seasonally adjusted reading of 49.7 percent, indicating growth in new orders. Manufacturing is starting out the year on a positive note, with all five of the PMI™'s component indexes — new orders, production, employment, supplier deliveries and inventories — registering above 50 percent in January."

WHAT RESPONDENTS ARE SAYING …

  • "Fiscal cliff, uncertainty in general and EU economic weakness are factors causing our customers to be very tentative with commitments for product purchases in 2013." (Machinery)
  • "Midwest drought impact will be felt at least through midyear, impacting protein, sweeteners, eggs, oils, emulsifiers, etc." (Food, Beverage & Tobacco Products)
  • "Slowing interest in high-dollar purchases reflects continuing economic uncertainty." (Miscellaneous Manufacturing)
  • "Expenditure and investment are expected to remain high in North America in Q1 and Q2, 2013." (Petroleum & Coal Products)
  • "Housing sales are trending upward in light of overall market uncertainty, translating to improving optimism in appliance market." (Electrical Equipment, Appliances & Components)
  • "Still waiting for reaction to consumer tax increases." (Fabricated Metal Products)
  • "Government spending is very low, probably due to the fiscal cliff and the looming debt ceiling." (Transportation Equipment)
  • "Business is improving." (Furniture & Related Products)
  • "The general theme developing in our industry is that we can move suitable volumes. However, profit margin is elusive." (Wood Products)
  • "Overall production volume decreasing. Decrease is led by decline in exports of 10 percent." (Chemical Products)
MANUFACTURING AT A GLANCE
JANUARY 2013
Index Series
Index
Jan
Series
Index
Dec
Percentage
Point
Change
Direction Rate
of
Change
Trend*
(Months)
PMI™ 53.1 50.2 +2.9 Growing Faster 2
New Orders 53.3 49.7 +3.6 Growing From Contracting 1
Production 53.6 52.6 +1.0 Growing Faster 5
Employment 54.0 51.9 +2.1 Growing Faster 40
Supplier Deliveries 53.6 53.7 -0.1 Slowing Slower 3
Inventories 51.0 43.0 +8.0 Growing From Contracting 1
Customers' Inventories 48.5 47.0 +1.5 Too Low Slower 14
Prices 56.5 55.5 +1.0 Increasing Faster 6
Backlog of Orders 47.5 48.5 -1.0 Contracting Faster 10
Exports 50.5 51.5 -1.0 Growing Slower 2
Imports 50.0 51.5 -1.5 Unchanged From Growing 1
OVERALL ECONOMY Growing Faster 44
Manufacturing Sector Growing Faster 2

*Number of months moving in current direction
Indexes reflect newly released seasonal adjustment factors.

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