Manufacturing Jump in July: PMI Rises 4.5 Points

After a strong start to 2013, the Purchasing Managers Index (PMI) was in a steady decline, but a strong summer has resulted in the highest PMI rating since June, 2011, with a July, 2013 rating of 55.4. The PMI is a report maintained by the Institute for Supply Management (ISM) that indicates conditions of the manufacturing industry. The PMI score is on a scale of 0-100, with a rating over 50 indicating better conditions than the previous month.

There are five weighted indicators that are analyzed from a survey, distributed to over 400 purchasing managers around the country: New Orders from Customers (30%), Production Level (25%), Employment Level (20%), Supplier Delivery Speed (15%), and Inventories (10%). Significant growth was seen in production (up 11.6 points), new orders (+6.4), and employment (+5.7).

Much of the growth may actually be resulting from manufacturers decreasing important their ratings. Inventories and costs are both down 3.5 points on the scale, while backlogs are also down (-1.5) from June. This indicates that manufacturers are successfully managing their raw materials and production schedules.

Inventory management will play a significant role in manufacturing growth.  As technology continues to develop, the supply chain will become more transparent and easier to manage. The best way to stay ahead of the competition is to implement the best ERP solution for managing your manufacturing business.

Learn how you can control costs, automate tedious administrative functions, and track your products and employees with advanced analytics. SBS Group provides solutions for all of your manufacturing ERP needs. You can also follow us on Twitter and Facebook, and keep up with the latest industry trends on our LinkedIn page.

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