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Manufacturing Employment Drops Again, But Looking Up: Institute of Supply Management


Computer manufacturing was down again in May, but five industries are on the rise, and employment is up in two industries.

The Institute of Supply Management’s Employment Index dropped to 34.3 percent in May, the 10th consecutive monthly decline of the  organization’s measure of hiring. Readings of less than 50 on the group’s gauge signal a contraction.

But there was good news for executives working or trying to work in the field. Two of the 18 manufacturing industries tracked by ISM — Nonmetallic Mineral Products and Food, Beverage & Tobacco Products — improved from April to May and the over all index of new orders jumped from 47.2 percent in April  to 51.1 percent, the first such rise in 18 months. Nine of 18 industries reported growth in this index.

“While employment and inventories continue to decline at a rapid rate and the sector continued to contract during the month, there are signs of improvement,” said ISM Chairman Norbert J. Ore in a prepared statement. “May is the first month of growth in the New Orders Index since November 2007, with nine of 18 industries reporting growth. New orders are considered a leading indicator, and the index has risen rapidly after bottoming at 23.1 percent in December 2008.”

Also good news for things to come: “Customers’ Inventories Index remained below 50 percent for the second consecutive month, offering encouragement that supply chains are starting to free themselves of excess inventories as nine industries report their customers’ inventories as ‘too low,’ ” Norbert said.

Five industries reported manufacturing growth in May:

  • Nonmetallic Mineral Products
  • Plastics & Rubber Products
  • Machinery
  • Food, Beverage & Tobacco Products
  • Printing & Related Support Activities

13 industries reporting manufacturing contraction in May (in order):

  • Textile Mills
  • Furniture & Related Products
  • Electrical Equipment, Appliances & Components
  • Fabricated Metal Products
  • Primary Metals
  • Transportation Equipment
  • Computer & Electronic Products
  • Wood Products
  • Apparel, Leather & Allied Products
  • Miscellaneous Manufacturing
  • Chemical Products
  • Petroleum & Coal Products
  • Paper Products

(Technology Manufacturing by  jurvetson, CC3.0)

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