May 2012 ISM Reports

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The pace of growth in manufacturing slowed slightly in May, with the Institute for Supply Management’s (ISM) PMI dropping to 53.5 percent, from 54.8 in March (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, concluded with, “Comments from the panel generally reflect stable-to-strong orders, with sales showing steady improvement over the first five months of 2012."
 

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The non-manufacturing sector grew at a slightly faster pace in May, reflected by a 0.2 percentage point rise (to 53.7 percent) in the non-manufacturing index (now known simply as the “NMI”). "The majority of the respondents' comments are positive and optimistic about business conditions and the direction of the economy," concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee.
 

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Although the subindices netted out to no change for Wood Products, we note the increase in new orders (including exports) and decreasing imports as positive signs. Paper Products expanded as new orders (including exports), production and employment all rose. Real Estate and Construction both reported expansion in overall activity, while Ag & Forestry was unchanged. "Q2 will be a strong quarter for us; the building market is starting to wake up," claimed one Construction respondent.

Prices for corrugated, lumber and paper products all increased in May. Caustic soda was the only relevant commodity down in price. No relevant commodities were in short supply.