Update on the ISM's PMI- Yes a Little Late

OK, this post is mainly for me, as the ISM's Purchasing Managers' Index came out some time ago. I had actually forgot to post this originally, and its got lost in the shuffle.

In any event, I would categorize the latest PMI results (both US and international) with a seemingly indifferent outlook. Looking at the US results, shown below, the PMI of 51.3 still indicates growth in US manufacturing. However, this comes off significant weaker results in production and new orders. Additionally, customer inventory levels seem more benign at a 47.5 demarcation, towards the higher end the measures central tendency. This is somewhat worrisome considering that the customer inventories index was over 49 in the last few months, indicating an increased likelihood of lower new order rates, but all-in-all nothing of significant concern currently. That said, you would think that the overall results would be consistently stronger a few years into recovery.

WHAT RESPONDENTS ARE SAYING ...

• "Beginning to feel the seasonal upswing in business — energy and resin remain a concern." (Food, Beverage & Tobacco Products)
• "Medical reimbursements from insurance companies, particularly Medicare, are slowing." (Miscellaneous Manufacturing)
• "While the second half of 2013 looks promising, the first half is a mixed bag." (Computer & Electronic Products)
• "Things seem slightly better than last year, but still not great." (Printing & Related Support Activities)
• "Automotive is still very strong." (Fabricated Metal Products)
• "Post-election in the U.S. — companies within the oil and gas sector are still waiting for signs of some regulatory certainty or stability." (Petroleum & Coal Products)
• "Reduced government spending in the defense sector lowers business output." (Transportation Equipment)
• "Business is continuing to be brisk." (Furniture & Related Products)
• "Market continues to be strong, and our production is exceeding plans at this time." (Wood Products)
• "Sales are low, even adjusted for seasonal variation." (Chemical Products)

MANUFACTURING AT A GLANCE MARCH 2013
Index	Series Index Mar	Series Index Feb	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI™	51.3	54.2	-2.9	Growing	Slower	4
New Orders	51.4	57.8	-6.4	Growing	Slower	3
Production	52.2	57.6	-5.4	Growing	Slower	7
Employment	54.2	52.6	+1.6	Growing	Faster	42
Supplier Deliveries	49.4	51.4	-2.0	Faster	From Slowing	1
Inventories	49.5	51.5	-2.0	Contracting	From Growing	1
Customers' Inventories	47.5	46.5	+1.0	Too Low	Slower	16
Prices	54.5	61.5	-7.0	Increasing	Slower	8
Backlog of Orders	51.0	55.0	-4.0	Growing	Slower	2
Exports	56.0	53.5	+2.5	Growing	Faster	4
Imports	54.0	54.0	0.0	Growing	Same	2
OVERALL ECONOMY				Growing	Slower	46
Manufacturing Sector				Growing	Slower	4

More positively, the Global PMI Excluding the U.S. improved and is now indicating global manufacturing improved in the latest month. The April Global PMI, excluding the U.S., improved to 51.2, indicating an expansion in manufacturing activity. This came off of better output results (52.4) and new order rates (52.4). These results appear to indicate an alleviate risk of recession, globally. 

The following chart shows the Global PMI and other components versus the US PMI (dark purple).