03 September 2013 16:52 [Source: ICIS news]
WASHINGTON (ICIS)--The US manufacturing sector expanded in August for the third consecutive month, a key survey said on Tuesday, reaching its highest growth rate for this year and the best performance since June 2011.
In its monthly report on the broad US manufacturing industry, the Institute for Supply Management (ISM) said that its purchasing managers index (PMI) rose marginally by 0.3 percentage points to 55.7% in August from the July reading of 55.4%.
The PMI is a composite of supplier responses to the ISM’s monthly survey of 10 different business performance measures in 18 major manufacturing sectors. Among the performance areas measured are new orders, employment, materials prices, imports and exports.
A PMI reading above 50% indicates the US manufacturing sector is expanding, while an index measure below 50% means production is contracting.
The index slipped into contraction in May this year, falling to 49.0%, but then recovered to 50.9% in June before making a strong jump to 55.4% in July.
Among the PMI’s subsidiary measures, new orders rose by nearly 5% in August, the backlog of orders rose 1.5% and exports increased by 2% while imports rose by only 0.5%.
On the down side, production fell by 2.6% last month and employment in manufacturing fell 1.1%.
Chemicals manufacturing and plastics production were among 15 major sectors reporting growth in August, the survey said.
Other manufacturing industries reporting growth last month are key downstream consumers of chemicals and resins, including textiles, wood products, appliances, food and beverages, computers, furniture, transportation equipment and paper products.
Historically, a reading in the mid-50s is a healthy range for the PMI, which in its 65 years only occasionally has seen manufacturing expansion rates in the upper 50s and the low 60s, mostly in the in the high growth years of the 1950s and 1960s as the post-war baby boom generation helped drive demand.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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