FOR RELEASE: December 1, 2005

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

PMI at 58.1%

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 2005.

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New Orders, Production Expanding
Employment Growing, Deliveries Slowing
Prices Increasing

(Tempe, Arizona) — Economic activity in the manufacturing sector grew in November for the 30th consecutive month, while the overall economy grew for the 49th 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, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The manufacturing sector expanded in November based on the ISM data. The PMI again showed significant strength in manufacturing activity as the index indicates strong growth during the month. The New Orders and Production indexes continue to drive the sector. While energy costs and supply interruptions remain a concern, purchasers are satisfied in general with current business conditions."

TOP PERFORMING INDUSTRIES

The 17 industries reporting growth in November — listed in order — are: Apparel; Rubber & Plastic Products; Electronic Components & Equipment; Tobacco; Textiles; Miscellaneous*; Primary Metals; Food; Paper; Chemicals; Industrial & Commercial Equipment & Computers; Instruments & Photographic Equipment; Furniture; Transportation & Equipment; Fabricated Metals; Glass, Stone & Aggregate; and Printing & Publishing.

WHAT RESPONDENTS ARE SAYING ...

• "The hurricanes along the Gulf Coast are still impacting the supply and delivery of some products and materials." (Chemicals)
• "Our business has held strong through the third quarter and we are on track for a record sales year." (Electronic Components & Equipment)
• "Our production is sold out for the rest of the year. Spare parts are difficult to get due to long leadtimes. (Glass, Stone & Aggregate)
• "Concerned that business will be slowing due to housing decline." (Industrial & Commercial Equipment & Computers)
• "The hurricanes destroyed many trucks ... [which resulted in] extra business." (Transportation & Equipment)

MANUFACTURING AT A GLANCE NOVEMBER 2005
Index	Series Index November	Series Index October	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI	58.1	59.1	-1.0	Growing	Slower	30
New Orders	59.8	61.7	-1.9	Growing	Slower	31
Production	60.6	62.0	-1.4	Growing	Slower	31
Employment	56.6	55.0	+1.6	Growing	Faster	5
Supplier Deliveries	58.3	61.7	-3.4	Slowing	Slower	29
Inventories	49.3	48.1	+1.2	Contracting	Slower	8
Customers' Inventories	43.5	41.0	+2.5	Too Low	Slower	54
Prices	74.0	84.0	-10.0	Increasing	Slower	4
Backlog of Orders	53.0	55.5	-2.5	Growing	Slower	4
Exports	59.2	54.8	+4.4	Growing	Faster	47
Imports	54.1	58.2	-4.1	Growing	Slower	48
OVERALL ECONOMY				Growing	Slower	49
Manufacturing Sector				Growing	Slower	30

*Number of months moving in current direction

COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY

Commodities Up in Price

Aluminum (4); Caustic Soda (19); Chemicals (22); Copper (6); Corn Syrup/Sweeteners; Corrugated Containers*; Energy (10); Fuel Surcharges (5); Gasoline* (5); Hydrochloric Acid; LDPE; Natural Gas* (40); Oil (7); Paper (2); PET; Petroleum Products; Plastic Resins (10); Plastics (16); Polyethylene (2); Resins (5); Rubber; Steel (26); and Sugar (2).

Commodities Down in Price

Corrugated Containers*; Diesel Fuel; Gasoline*; Natural Gas*; and Nickel (2).

Commodities in Short Supply

Caustic Soda; Copper (2); Steel (2); and Sugar.

*Reported as both up and down in price.
Note: The number of consecutive months the commodity is listed is indicated after each item.

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NOVEMBER 2005 MANUFACTURING INDEX SUMMARIES

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PMI

The PMI indicates that the manufacturing economy grew in November for the 30th consecutive month. The PMI for November registered 58.1 percent, a decrease of 1 percentage point when compared to October's reading of 59.1 percent. 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 42.7 percent, over a period of time, generally indicates an expansion of the overall economy. The November PMI indicates that both the overall economy and the manufacturing sector are growing. The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (55.7 percent) corresponds to a 4.7 percent increase in real gross domestic product (GDP) on an annual basis. In addition, if the PMI for November (58.1 percent) is annualized, it corresponds to a 5.6 percent increase in real GDP annually.

THE LAST 12 MONTHS

Month	PMI		Month	PMI
Nov 2005	58.1		May 2005	51.4
Oct 2005	59.1		Apr 2005	53.3
Sep 2005	59.4		Mar 2005	55.2
Aug 2005	53.6		Feb 2005	55.3
Jul 2005	56.6		Jan 2005	56.4
Jun 2005	53.8		Dec 2004	57.3
Average for 12 months – 55.8 High – 59.4 Low – 51.4

New Orders

ISM's New Orders Index grew in November with a reading of 59.8 percent. The index is 1.9 percentage points lower than the 61.7 percent registered in October, and November is the 31st consecutive month the index has exceeded 50 percent. A New Orders Index above 51.1 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars). Thirteen industries reported increases during November: Apparel; Rubber & Plastic Products; Textiles; Paper; Electronic Components & Equipment; Miscellaneous*; Chemicals; Industrial & Commercial Equipment & Computers; Food; Primary Metals; Transportation & Equipment; Instruments & Photographic Equipment; and Printing & Publishing.

New Orders	% Better	% Same	% Worse	Net	Index
Nov 2005	30	54	16	+14	59.8
Oct 2005	30	54	16	+14	61.7
Sep 2005	35	53	12	+23	63.8
Aug 2005	29	50	21	+8	56.4

Production

ISM's Production Index registered 60.6 percent in November, 1.4 percentage points lower than the 62 percent reported in October. November is the 31st consecutive month of growth in the index. An index above 50 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. Of the industries reporting in November, 16 registered growth: Tobacco; Apparel; Textiles; Rubber & Plastic Products; Primary Metals; Electronic Components & Equipment; Miscellaneous*; Food; Industrial & Commercial Equipment & Computers; Wood & Wood Products; Printing & Publishing; Paper; Chemicals; Fabricated Metals; Instruments & Photographic Equipment; and Transportation & Equipment.

Production	% Better	% Same	% Worse	Net	Index
Nov 2005	30	59	11	+19	60.6
Oct 2005	31	57	12	+19	62.0
Sep 2005	37	52	11	+26	63.1
Aug 2005	23	60	17	+6	55.9

Employment

ISM's Employment Index registered growth in November for the fifth consecutive month. The index registered 56.6 percent in November compared to 55 percent in October, an increase of 1.6 percentage points. An Employment Index above 48.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. The 12 industries reporting growth in employment during November are: Apparel; Electronic Components & Equipment; Miscellaneous*; Furniture; Glass, Stone & Aggregate; Primary Metals; Rubber & Plastic Products; Fabricated Metals; Instruments & Photographic Equipment; Industrial & Commercial Equipment & Computers; Transportation & Equipment; and Food.

Employment	% Higher	% Same	% Lower	Net	Index
Nov 2005	19	72	9	+10	56.6
Oct 2005	18	69	13	+5	55.0
Sep 2005	19	65	16	+3	53.1
Aug 2005	16	70	14	+2	52.6

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower for the 29th consecutive month in November. ISM's Supplier Deliveries Index for November registered 58.3 percent, a decrease of 3.4 percentage points when compared to October's reading of 61.7 percent. A reading above 50 percent indicates slower deliveries. The 10 industries reporting slower supplier deliveries in November are: Apparel; Glass, Stone & Aggregate; Chemicals; Fabricated Metals; Furniture; Food; Instruments & Photographic Equipment; Wood & Wood Products; Primary Metals; and Electronic Components & Equipment.

Supplier Deliveries	% Slower	% Same	% Faster	Net	Index
Nov 2005	19	74	7	+12	58.3
Oct 2005	26	70	4	+22	61.7
Sep 2005	21	75	4	+17	59.3
Aug 2005	8	87	5	+3	50.5

Inventories

Manufacturers' inventories declined in November for the eighth consecutive month as ISM's Inventories Index registered 49.3 percent, indicating a slower rate of liquidation when compared to October's reading of 48.1. November's index represents a 1.2 percentage point increase over October. An Inventories Index greater than 42.3 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA) figures on overall manufacturing inventories (in chained 2000 dollars). The five industries reporting higher inventories in November are: Apparel; Miscellaneous*; Furniture; Wood & Wood Products; and Paper.

Inventories	% Higher	% Same	% Lower	Net	Index
Nov 2005	15	64	21	-6	49.3
Oct 2005	13	67	20	-7	48.1
Sep 2005	17	65	18	-1	49.6
Aug 2005	16	62	22	-6	45.7

Customers' Inventories**

The November Customers' Inventories Index is at 43.5 percent, 2.5 percentage points higher than the 41 percent reported in October. Respondents indicate that their customers do not have sufficient inventories on hand (inventories are too low) at this time. This is the 54th consecutive month that the index has registered below 50 percent. Furniture is the only industry reporting higher customers' inventories during November.

Customers' Inventories	% Reporting	%Too High	%About Right	%Too Low	Net	Index
Nov 2005	72	9	69	22	-13	43.5
Oct 2005	79	8	66	26	-18	41.0
Sep 2005	74	9	71	20	-11	44.5
Aug 2005	72	13	67	20	-7	46.5

Prices**

In November, the ISM Prices Index was 74 percent, indicating significant growth. However, it is down 10 percentage points from the 84 percent it registered in October. While 53 percent of supply executives reported paying higher prices and 5 percent reported paying lower prices, 42 percent reported that prices were unchanged from the preceding month.

A Prices Index above 47.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices. In November, 17 industries reported paying higher prices: Textiles; Glass, Stone & Aggregate; Rubber & Plastic Products; Miscellaneous*; Furniture; Food; Instruments & Photographic Equipment; Industrial & Commercial Equipment & Computers; Printing & Publishing; Primary Metals; Apparel; Paper; Chemicals; Transportation & Equipment; Electronic Components & Equipment; Fabricated Metals; and Wood & Wood Products.

Prices	% Higher	% Same	% Lower	Net	Index
Nov 2005	53	42	5	+48	74.0
Oct 2005	70	28	2	+68	84.0
Sep 2005	60	36	4	+56	78.0
Aug 2005	36	53	11	+25	62.5

Backlog of Orders**

ISM's Backlog of Orders Index registered 53 percent, indicating manufacturers' backlogs in November are growing when compared to October. This represents a 2.5 percentage point decrease compared to the 55.5 percent reported in October. Of the 83 percent of respondents who report their backlog of orders, 24 percent reported greater backlogs, 18 percent reported smaller backlogs, and 58 percent reported no change from October. The eight industries reporting an increase in order backlogs during the month are: Apparel; Rubber & Plastic Products; Electronic Components & Equipment; Industrial & Commercial Equipment & Computers; Furniture; Food; Chemicals; and Primary Metals.

Backlog of Orders	% Reporting	% Greater	% Same	% Less	Net	Index
Nov 2005	83	24	58	18	+6	53.0
Oct 2005	85	29	53	18	+11	55.5
Sep 2005	85	28	54	18	+10	55.0
Aug 2005	87	23	55	22	+1	50.5

New Export Orders

ISM's New Export Orders Index for November registered 59.2 percent, an increase of 4.4 percentage points when compared to October's index of 54.8 percent. This is the 47th consecutive month of growth in export orders. The 12 industries reporting growth in new export orders in November are: Textiles; Apparel; Miscellaneous*; Paper; Instruments & Photographic Equipment; Printing & Publishing; Chemicals; Industrial & Commercial Equipment & Computers; Electronic Components & Equipment; Fabricated Metals; Rubber & Plastic Products; and Food.

New Export Orders	% Reporting	% Higher	% Same	% Lower	Net	Index
Nov 2005	74	19	78	3	+16	59.2
Oct 2005	76	15	77	8	+7	54.8
Sep 2005	74	17	78	5	+12	56.9
Aug 2005	78	14	79	7	+7	53.3

Imports

Imports of materials by manufacturers grew during November as the Imports Index registered 54.1 percent. The index decreased 4.1 percentage points when compared to October's index of 58.2 percent, indicating a slower rate of growth. The 10 industries reporting growth in import activity for November are: Apparel; Furniture; Transportation & Equipment; Electronic Components & Equipment; Industrial & Commercial Equipment & Computers; Rubber & Plastic Products; Instruments & Photographic Equipment; Chemicals; Food; and Fabricated Metals.

Imports	% Reporting	% Higher	% Same	% Lower	Net	Index
Nov 2005	78	15	77	8	+7	54.1
Oct 2005	78	20	72	8	+12	58.2
Sep 2005	77	16	76	8	+8	53.4
Aug 2005	77	16	75	9	+7	53.4

*Miscellaneous is a preponderance of jewelry, toys, sporting goods and musical instruments.
**The Backlog of Orders, Prices and Customers' Inventories Indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy

Average commitment leadtime for Capital Expenditures decreased 2 days to 108 days. Average leadtime for Production Materials was unchanged at 50 days. Average leadtime for Maintenance, Repair and Operating (MRO) supplies decreased 2 days to 22 days.

Percent Reporting
Capital Expenditures	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Nov 2005	24	9	16	17	24	10	108
Oct 2005	25	8	13	18	26	10	110
Sep 2005	25	9	14	18	25	9	106
Aug 2005	22	10	10	21	24	13	119
Production Materials	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Nov 2005	16	41	27	11	4	1	50
Oct 2005	22	36	25	12	3	2	50
Sep 2005	23	38	26	9	2	2	47
Aug 2005	22	38	23	11	4	2	51
MRO Supplies	Hand- to- Mouth	30 Days	60 Days	90 Days	6 Months	1 Year+	Average Days
Nov 2005	55	30	12	3	0	0	22
Oct 2005	51	32	13	3	1	0	24
Sep 2005	53	33	11	3	0	0	22
Aug 2005	50	37	9	4	0	0	23

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 monthly replies to questions asked of purchasing and supply executives in over 400 industrial companies. Membership of the Business Survey Committee is diversified by Standard Industrial Classification (SIC) category, based on each industry's contribution to gross domestic product (GDP). Twenty industries from various U.S. geographical areas are represented on the committee. The 20 manufacturing Standard Industry Classification codes are: Food; Tobacco; Textiles; Apparel; Wood & Wood Products; Furniture; Paper; Printing & Publishing; Chemicals; Petroleum; Rubber & Plastic Products; Leather; Glass, Stone & Aggregate; Primary Metals; Fabricated Metals; Industrial & Commercial Equipment & Computers; Electronic Components & Equipment; Transportation & Equipment; Instruments & Photographic Equipment; and Miscellaneous (a preponderance of jewelry, toys, sporting goods and musical instruments).

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 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 varying weights: New Orders – 30%; Production – 25%; Employment – 20%; Supplier Deliveries – 15%; and Inventories – 10%.

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 42.7 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.7 percent, it is generally declining. The distance from 50 percent or 42.7 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 leadtime, 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 2005 data will be released at 10:00 a.m. (ET) on January 3, 2006.

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