FOR RELEASE: December 1, 2009

Contact:

Rose Marie Goupil ISM, ROB Media Relations Tempe, Arizona 800/888-6276, Ext. 3015 E-mail: rgoupil@ism.ws

PMI at 53.6%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of November 2009.

New Orders, Production and Employment Growing
Inventories Contracting
Supplier Deliveries Slower

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in November for the fourth consecutive month, and the overall economy grew for the seventh consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business^®.

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The manufacturing sector grew for the fourth consecutive month in November. While the rate of growth slowed when compared to October, the signs are still encouraging for continuing growth as both new orders and production are still at very positive levels, and the Prices Index fell 10 points, signaling less inflationary pressure on manufacturers' costs. Overall, the recovery in manufacturing is continuing, but many are still struggling based on their comments."

PERFORMANCE BY INDUSTRY

In November, 12 of the 18 manufacturing industries reported growth. The industries — listed in order — are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Petroleum & Coal Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Transportation Equipment; Chemical Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; Fabricated Metal Products; and Machinery. The five industries reporting contraction in November are: Wood Products; Furniture & Related Products; Nonmetallic Mineral Products; Primary Metals; and Plastics & Rubber Products.

WHAT RESPONDENTS ARE SAYING ...

• "Becoming concerned about the value of the U.S. dollar." (Apparel, Leather & Allied Products)
• "Low value of the dollar driving commodity costs higher." (Food, Beverage & Tobacco Products)
• "Demand from automotive manufacturers remains strong and building." (Fabricated Metal Products)
• "Capital construction seems to be picking up, and we are seeing more jobs that are bid out." (Electrical Equipment, Appliances & Components)
• "Steady increase in business." (Primary Metals)

MANUFACTURING AT A GLANCE NOVEMBER 2009
Index	Series Index November	Series Index October	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI	53.6	55.7	-2.1	Growing	Slower	4
New Orders	60.3	58.5	+1.8	Growing	Faster	5
Production	59.9	63.3	-3.4	Growing	Slower	6
Employment	50.8	53.1	-2.3	Growing	Slower	2
Supplier Deliveries	55.7	56.9	-1.2	Slowing	Slower	6
Inventories	41.3	46.9	-5.6	Contracting	Faster	43
Customers' Inventories	37.0	38.5	-1.5	Too Low	Faster	8
Prices	55.0	65.0	-10.0	Increasing	Slower	5
Backlog of Orders	52.0	53.5	-1.5	Growing	Slower	4
Exports	56.0	55.5	+0.5	Growing	Faster	5
Imports	51.5	51.0	+0.5	Growing	Faster	3
OVERALL ECONOMY				Growing	Slower	7
Manufacturing Sector				Growing	Slower	4

*Number of months moving in current direction

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (5); Copper (6); Copper Based Products (5); Natural Gas (2); Oil; and Steel (5).

Commodities Down in Price

No commodities are reported down in price.

Commodities in Short Supply

Electronic Components is the only commodity reported in short supply.

Note: The number of consecutive months the commodity is listed is indicated after each item.

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NOVEMBER 2009 MANUFACTURING INDEX SUMMARIES

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PMI

Manufacturing growth decelerated in November as the PMI registered 53.6 percent, a decrease of 2.1 percentage points when compared to October's reading of 55.7 percent. This continues the recovery in the sector, but at a slower rate of growth. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 41.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the seventh consecutive month in the overall economy, as well as expansion in the manufacturing sector for the fourth consecutive month. Ore stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (45.4 percent) corresponds to a 1.3 percent increase in real gross domestic product (GDP). However, if the PMI for November (53.6 percent) is annualized, it corresponds to a 3.9 percent increase in real GDP annually."

THE LAST 12 MONTHS

Month	PMI		Month	PMI
Nov 2009	53.6		May 2009	42.8
Oct 2009	55.7		Apr 2009	40.1
Sep 2009	52.6		Mar 2009	36.3
Aug 2009	52.9		Feb 2009	35.8
Jul 2009	48.9		Jan 2009	35.6
Jun 2009	44.8		Dec 2008	32.9
Average for 12 months – 44.3 High – 55.7 Low – 32.9

New Orders

ISM's New Orders Index registered 60.3 percent in November, 1.8 percentage points higher than the 58.5 percent registered in October. This is the fifth consecutive month of growth in the New Orders Index. A New Orders Index above 48.8 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

The 13 industries reporting growth in new orders in November — listed in order — are: Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Computer & Electronic Products; Paper Products; Plastics & Rubber Products; Primary Metals; Food, Beverage & Tobacco Products; Chemical Products; Machinery; and Fabricated Metal Products. The four industries reporting decreases in new orders in November are: Wood Products; Nonmetallic Mineral Products; Furniture & Related Products; and Transportation Equipment.

New Orders	% Better	% Same	% Worse	Net	Index
Nov 2009	36	42	22	+14	60.3
Oct 2009	34	42	24	+10	58.5
Sep 2009	42	38	20	+22	60.8
Aug 2009	43	41	16	+27	64.9

Production

ISM's Production Index registered 59.9 percent in November, which is a decrease of 3.4 percentage points from the October reading of 63.3 percent. An index above 50.4 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. This is the sixth consecutive month the Production Index has registered above 50 percent.

The 11 industries reporting growth in production during the month of November — listed in order — are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Transportation Equipment; Chemical Products; Computer & Electronic Products; Paper Products; Machinery; and Fabricated Metal Products. The three industries reporting decreases in production in November are: Wood Products; Furniture & Related Products; and Plastics & Rubber Products.

Production	% Better	% Same	% Worse	Net	Index
Nov 2009	33	50	17	+16	59.9
Oct 2009	37	48	15	+22	63.3
Sep 2009	36	46	18	+18	55.7
Aug 2009	43	39	18	+25	61.9

Employment

ISM's Employment Index registered 50.8 percent in November, which is 2.3 percentage points lower than the 53.1 percent reported in October. This is the second month of growth in manufacturing employment following 14 consecutive months of decline. An Employment Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Six of the 18 manufacturing industries reported growth in employment in November in the following order: Textile Mills; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Transportation Equipment. The six industries that reported decreases in employment during November — listed in order — are: Wood Products; Primary Metals; Furniture & Related Products; Nonmetallic Mineral Products; Computer & Electronic Products; and Chemical Products.

Employment	% Higher	% Same	% Lower	Net	Index
Nov 2009	17	65	18	-1	50.8
Oct 2009	20	64	16	+4	53.1
Sep 2009	15	62	23	-8	46.2
Aug 2009	13	68	19	-6	46.4

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in November as the Supplier Deliveries Index registered 55.7 percent, which is 1.2 percentage points lower than the 56.9 percent registered in October. This is the sixth consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.

The seven industries reporting slower supplier deliveries in November — listed in order — are: Transportation Equipment; Nonmetallic Mineral Products; Computer & Electronic Products; Plastics & Rubber Products; Chemical Products; Electrical Equipment, Appliances & Components; and Fabricated Metal Products. The only industry reporting faster deliveries in November is Textile Mills.

Supplier Deliveries	% Slower	% Same	% Faster	Net	Index
Nov 2009	15	80	5	+10	55.7
Oct 2009	15	83	2	+13	56.9
Sep 2009	24	71	5	+19	58.0
Aug 2009	18	79	3	+15	57.1

Inventories

Manufacturers' inventories contracted at a faster rate in November as the Inventories Index registered 41.3 percent. The index is 5.6 percentage points lower than the October reading of 46.9 percent. An Inventories Index greater than 42.6 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

Apparel, Leather & Allied Products is the only one of 18 manufacturing industries reporting higher inventories in November. The 13 industries that reported decreases in inventories in November — listed in order — are: Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Machinery; Miscellaneous Manufacturing; Paper Products; Fabricated Metal Products; Transportation Equipment; Computer & Electronic Products; and Chemical Products.

Inventories	% Higher	% Same	% Lower	Net	Index
Nov 2009	8	63	29	-21	41.3
Oct 2009	19	55	26	-7	46.9
Sep 2009	14	55	31	-17	42.5
Aug 2009	14	44	42	-28	34.4

Customers' Inventories*

The ISM Customers' Inventories Index registered 37 percent in November, slightly lower than in October when the index registered 38.5 percent. The index indicates that respondents believe their customers' inventories are too low at this time. This is the eighth consecutive month the Customers' Inventories Index has been below 50 percent.

The two industries reporting higher customers' inventories during November are: Furniture & Related Products; and Chemical Products. The 12 industries that reported lower customers' inventories during November — listed in order — are: Wood Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Primary Metals; Apparel, Leather & Allied Products; Transportation Equipment; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Machinery; Computer & Electronic Products; and Fabricated Metal Products.

Customers' Inventories	% Reporting	%Too High	%About Right	%Too Low	Net	Index
Nov 2009	75	7	60	33	-26	37.0
Oct 2009	75	7	63	30	-23	38.5
Sep 2009	71	9	60	31	-22	39.0
Aug 2009	75	12	54	34	-22	39.0

Prices*

The ISM Prices Index registered 55 percent in November, 10 percentage points lower than the 65 percent reported in October. This is the fifth consecutive month that the Prices Index has registered above 50 percent. While 20 percent of respondents reported paying higher prices and 10 percent reported paying lower prices, 70 percent of supply executives reported paying the same prices as in October. A Prices Index above 47.6 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.

The eight industries reporting paying increased prices during the month of November — listed in order — are: Textile Mills; Plastics & Rubber Products; Computer & Electronic Products; Paper Products; Chemical Products; Fabricated Metal Products; Machinery; and Electrical Equipment, Appliances & Components. The only industry that reported paying lower prices during November is Miscellaneous Manufacturing.

Prices	% Higher	% Same	% Lower	Net	Index
Nov 2009	20	70	10	+10	55.0
Oct 2009	37	56	7	+30	65.0
Sep 2009	36	55	9	+27	63.5
Aug 2009	38	54	8	+30	65.0

Backlog of Orders*

ISM's Backlog of Orders Index registered 52 percent in November, 1.5 percentage points lower than the 53.5 percent reported in October. Of the 85 percent of respondents who reported their backlog of orders, 23 percent reported greater backlogs, 19 percent reported smaller backlogs, and 58 percent reported no change from October.

The nine industries reporting increased order backlogs in November — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Paper Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Chemical Products; and Machinery. The seven industries that reported decreases in order backlogs during November — listed in order — are: Wood Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Primary Metals; Transportation Equipment; Fabricated Metal Products; and Printing & Related Support Activities.

Backlog of Orders	% Reporting	% Greater	% Same	% Less	Net	Index
Nov 2009	85	23	58	19	+4	52.0
Oct 2009	81	27	53	20	+7	53.5
Sep 2009	82	25	57	18	+7	53.5
Aug 2009	85	28	49	23	+5	52.5

New Export Orders*

ISM's New Export Orders Index registered 56 percent in November, 0.5 percentage point higher than the 55.5 percent reported in October. This is the fifth consecutive month of growth in the New Export Orders Index, following nine consecutive months of contraction.

The nine industries reporting growth in new export orders in November — listed in order — are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Chemical Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Machinery; and Transportation Equipment. The two industries reporting decreases in new export orders in November are: Nonmetallic Mineral Products and Primary Metals.

New Export Orders	% Reporting	% Higher	% Same	% Lower	Net	Index
Nov 2009	79	22	68	10	+12	56.0
Oct 2009	75	24	63	13	+11	55.5
Sep 2009	75	20	70	10	+10	55.0
Aug 2009	74	24	63	13	+11	55.5

Imports*

Imports of materials by manufacturers expanded in November as the Imports Index registered 51.5 percent, 0.5 percentage point higher than the 51 percent reported in October. Imports have contracted in 18 of the last 22 months.

The seven industries reporting growth in imports during the month of November — listed in order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Transportation Equipment; Miscellaneous Manufacturing; Machinery; Electrical Equipment, Appliances & Components; and Fabricated Metal Products. The four industries that reported decreases in imports in November are: Computer & Electronic Products; Primary Metals; Food, Beverage & Tobacco Products; and Chemical Products.

Imports	% Reporting	% Higher	% Same	% Lower	Net	Index
Nov 2009	81	12	79	9	+3	51.5
Oct 2009	82	14	74	12	+2	51.0
Sep 2009	80	13	78	9	+4	52.0
Aug 2009	81	15	69	16	-1	49.5

* The Backlog of Orders, Prices, Customers' Inventories, Imports and New Export Orders Indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy

Average commitment lead time for Capital Expenditures decreased 1 day to 102 days. Average lead time for Production Materials increased 7 days to 48 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 1 day to 22 days.

Percent Reporting
Capital Expenditures	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Nov 2009	35	6	10	13	27	9	102
Oct 2009	34	7	10	15	24	10	103
Sep 2009	30	8	15	16	22	9	99
Aug 2009	38	6	10	13	22	11	101
Production Materials	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Nov 2009	26	36	24	8	4	2	48
Oct 2009	25	40	26	6	2	1	41
Sep 2009	28	37	19	11	3	2	46
Aug 2009	27	40	20	8	2	3	47
MRO Supplies	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Nov 2009	56	29	12	2	1	0	22
Oct 2009	54	32	12	2	0	0	21
Sep 2009	55	28	12	5	0	0	23
Aug 2009	51	36	12	0	0	1	24

About this Report

The data presented herein is obtained from a survey of manufacturing supply managers based on information they have collected within their respective organizations. ISM makes no representation, other than that stated within this release, regarding the individual company data collection procedures. Use of the data is in the public domain and should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation

The Manufacturing ISM Report On Business^® is based on data compiled from purchasing and supply executives nationwide. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers' Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (PMI, New Orders, Production, Employment, Supplier Deliveries and Inventories) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The PMI is a composite index based on the seasonally adjusted diffusion indexes for five of the indicators with equal weights: New Orders, Production, Employment, Supplier Deliveries and Inventories.

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI in excess of 41.2 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 41.2 percent, it is generally declining. The distance from 50 percent or 41.2 percent is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis.

Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Production Materials; Capital Expenditures; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern.

The Manufacturing ISM Report On Business^® is published monthly by the Institute for Supply Management™. The Institute for Supply Management™, established in 1915, is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

The full text version of the Manufacturing ISM Report On Business^® is posted on ISM's Web site at www.ism.ws on the first business day of every month after 10:10 a.m. (ET).

The next Manufacturing ISM Report On Business^® featuring the December 2009 data will be released at 10:00 a.m. (ET) on Monday, January 4, 2010.

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