American manufacturers quantify their industry’s health through the Purchasing Managers Index (PMI), which is based on “new orders, inventory levels, production, supplier deliveries and the employment environment.” A PMI of 50 means the industry went unchanged while numbers above 50 indicate growth and those below 50 show shrinking industry health.
Institute for Supply Management
For July 2017, the Institute for Supply Management (ISM) reported a PMI of 56.3%, marking industry expansion for the month. While the ISM PMI for June was slightly higher at 57.8%, the industry has been growing for 11 months straight, contributing to the overall economy’s 98 consecutive months of growth.
Many individual indexes that make up the overall PMI showed growth as well: New orders were at 60.4%, production was at 60.6%, employment 55.2%, supplier deliveries 55.4%, and prices 62%. One remaining index, inventories, increased one point from 49 in June to 50 in July, marking the only stagnated index but still showing growth month over month. In addition, of the 18 manufacturing segments included in the PMI, 15 reported growth in the seventh month.
Information Handling Services Markit
Another company in manufacturing PMIs, Information Handling Services (IHS) Markit, produces its own index. The IHS Markit PMI shows U.S. manufacturing at its highest in four months at 53.3. Growing beyond its 52.0 measurement in June, the IHS Markit index, like the ISM PMI, indicates growth in the sector.
While the ISM and IHS Markit PMIs track American manufacturing numbers, J.P. Morgan analysts work alongside those with IHS Markit and ISM in addition to the International Federation of Purchasing and Supply Management (IFPSM) on the global PMI. Just like the American PMI, the global manufacturing PMI also grew. It increased to 52.7 in July from 52.6 the month before, the 17th consecutive month of global growth and the highest in three months. While European nations were major drivers of growth with the U.S. coming in at number 14, increasing job numbers in Europe and the U.S. added to manufacturing employment growing globally for the 11th month in a row.
With recent announcements from Foxconn, whose leaders committed to building a new flat panel screen plant in Wisconsin, and Walmart, whose decision-makers are building on a plan to invest in U.S. manufacturing and offering more U.S.-made products, prospects for PMI growth in the country are promising.