Various federal agencies and associations are reporting significant growth in the U.S. economy, according to recent reports compiled by the Daily Business News (DBN) on MHProNews.
Data from the National Association of Manufacturers (NAM) states that some 12 percent of the U.S. Gross Domestic Product (GDP) is tied to manufacturing. NAM cites the Bureau of Economic Analysis as a source for their information. Reuters provided a similar number, but was unclear on the source of their data.
In a release to MHProNews, Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) provided their latest Manufacturing Business Survey Committee report.
Per Fiore, 17 of 18 tracked manufacturing industries are rising, with only furniture and related products contracting last month.
But for those who are monitoring the debate over the potential Gross Domestic Product here in the U.S., the following by Fiore was under-reported. “The past relationship between the PMI® and the overall economy indicates that the average PMI® for January through September (57.1 percent) corresponds to a 4.4 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI® for September (60.8 percent) is annualized, it corresponds to a 5.5 percent increase in real GDP annually.”
Investopedia says that in this context, PMI® is the Purchasing Managers’ Index®.
Daily Business News readers will recall a recent report that pegged the U.S. GDP for the last quarter at 3.1 percent, which is a significantly better rate than during the Obama Administration years. CNBC opined that third quarter GDP may contact due to the 2017 hurricanes, but that 4th quarter GDP could spike.
Sept 2017 ISM ® Snapshots, by the Numbers
In looking at the statistics shown, keep in mind that ISM ® states that “A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.“
Fiore’s report will have significance for the manufactured housing industry on a variety of levels. Among the quotes from various sectors, per ISM’s new report, are as follows.
What Respondents Are Saying …
- “Hurricanes causing supply chain and pricing issues.” (Chemical Products)
- “Business levels continue [to be] strong; usually by now, a seasonal downturn begins.” (Machinery)
- “Energy sector (oil and gas) continues to be strong. Price of oil appears to be beginning to stabilize.” (Computer & Electronic Products)
- “We’ve had a very good year and we are forecasting continued strong demand for our product in 2018.” (Miscellaneous Manufacturing)
- “Business is strong. However, we are concerned about price increases due to the hurricanes.” (Plastics & Rubber Products)
- “We are closely watching the Houston events as many of our production chemicals are produced in the Gulf region. Some tightening of supply and/or price increases expected.” (Paper Products)
- “Labor shortages continue to haunt operational capacity both at [the] local plant [level] and up and down the supply chain.” (Transportation Equipment)
- “Hurricanes Harvey and Irma will have significant effects on input costs. Disruption in supply chain. Concerns of transportation.” (Food, Beverage & Tobacco Products)
- “Hurricane Harvey, and now Irma, have impacted the business (building materials). Increasing sales but also causing significant price increases on input raw materials.” (Nonmetallic Mineral Products)
Among the challenges that manufactured housing producers face is the labor issue. An informed source told MHProNews last night that a Texas producer is boosting pay to their workers to keep them from “jumping ship,” for more money workers might make by heading to Houston, and other storm impacted areas.
ISM says their data is considered to be highly reliable.
Per their website, “The ISM® Report On Business®, Manufacturing and Non-Manufacturing, are two of the most reliable economic indicators available, providing guidance to supply management professionals, economists, analysts, and government and business leaders.”
Their monthly reports come with this ISM® qualifier, “However, the reports are not meant to be the only barometers consulted by those interested in tracking the economy – they should be used in conjunction with other measurements.”
The DBN will revisit this report in the days ahead, as manufactured housing navigates the opportunities and challenges created in post-hurricane America in the Trump Administration era. ## (News, analysis.)
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