Manufacturing by the Numbers = Dichotomy

15/09/2011

If you're confused by the latest figures from the various groups that produce monthly reports on the manufacturing economy, you're not alone. One day we're hearing of all the job opportunities that exist in manufacturing - positions that go wanting for people to fill them so manufacturing companies can meet demand in a more timely manner and grow their businesses - and the next day we hear that non-farm payroll remained unchanged for the month of August - not one company added a new job. The unemployment rate remains steady at 9.1%, and 14 million people are unemployed, according to the latest report from the Bureau of Labor Statistics.

However, the Institute for Supply Management continues to put its positive spin on things. The ISM's Manufacturing Report on Business shows that activity in the manufacturing sector expanded in August for the 25th consecutive month, albeit at a slightly slower rate, a decrease of 0.3% to 50.6% from July's index.

The Production Index registered 48.6%, indicating contraction for the first time since May 2009, when it registered 45%. Both the New Orders and Backlog of Orders Indexes moved up slightly from July, but both indexes are indicating contraction in August at slower rates than in July. Not great news by any stretch of the imagination.
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