TEMPE, Ariz. — February 1, 2021 — Economic activity in the manufacturing sector grew in January, with the overall economy notching an eighth consecutive month of growth, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

“The January Manufacturing PMI registered 58.7 percent, down 1.8 percentage points from the seasonally adjusted December reading of 60.5 percent. This figure indicates expansion in the overall economy for the eighth month in a row after contraction in March, April, and May. The New Orders Index registered 61.1 percent, down 6.4 percentage points from the seasonally adjusted December reading of 67.5 percent. The Production Index registered 60.7 percent, a decrease of 4 percentage points compared to the seasonally adjusted December reading of 64.7 percent. The Backlog of Orders Index registered 59.7 percent, 0.6 percentage point above the December reading of 59.1 percent. The Employment Index registered 52.6 percent, 0.9 percentage point higher from the seasonally adjusted December reading of 51.7 percent. The Supplier Deliveries Index registered 68.2 percent, up 0.5 percentage point from the December figure of 67.7 percent. The Inventories Index registered 50.8 percent, 0.2 percentage point lower than the seasonally adjusted December reading of 51 percent. The Prices Index registered 82.1 percent, up 4.5 percentage points compared to the December reading of 77.6 percent. The New Export Orders Index registered 54.9 percent, a decrease of 2.6 percentage points compared to the December reading of 57.5 percent. The Imports Index registered 56.8 percent, a 2.2-percentage point increase from the December reading of 54.6 percent.”

Fiore continued: “The manufacturing economy continued its recovery in January. Survey committee members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are continuing to cause strains that limit manufacturing growth potential. However, panel sentiment remains optimistic (three positive comments for every cautious comment), similar to December levels. Demand expanded, with the (1) New Orders Index growing at a strong level, supported by the New Export Orders Index expanding, (2) Customers’ Inventories Index remaining in ‘too low’ territory and at a level considered a positive for future production, and the (3) Backlog of Orders Index remaining at high levels. Consumption (measured by the Production and Employment indexes) contributed negatively (a combined 3.1-percentage point decrease) to the Manufacturing PMI calculation. Five of the top six industries reported moderate to strong expansion. The Employment Index expanded for a second straight month, but panelists continue to note difficulties in attracting and retaining labor at their companies and supplier facilities. Inputs — expressed as supplier deliveries, inventories and imports — continued to indicate input-driven constraints to production expansion, at higher rates compared to December, as indicated by minimal gains in inventory levels and declining supplier performance. Imports expanded in the period, despite port backlogs, but not at levels desired by panelists. Supplier delivery struggles continued, contributing moderately to the Manufacturing PMI calculation. (The Supplier Deliveries and Inventories indexes directly factor into the Manufacturing PMI; the Imports Index does not.) The Prices Index surged dramatically in January, hitting a level last reached in April 2011, indicating continued supplier pricing power.

“Of the six biggest manufacturing industries, five — Chemical Products; Fabricated Metal Products; Transportation Equipment; Food, Beverage & Tobacco Products; and Computer & Electronic Products — registered moderate to strong growth in January. Petroleum & Coal Products contracted.

“Manufacturing performed well for the eighth straight month, with demand, consumption and inputs registering strong growth compared to December. Labor market difficulties at panelists’ companies and their suppliers will continue to restrict the manufacturing economy expansion until the coronavirus (COVID-19) crisis abates,” Fiore said.

Of the 18 manufacturing industries, 16 reported growth in January, in the following order: Electrical Equipment, Appliances & Components; Machinery; Primary Metals; Chemical Products; Fabricated Metal Products; Plastics & Rubber Products; Transportation Equipment; Apparel, Leather & Allied Products; Paper Products; Wood Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Furniture & Related Products; Miscellaneous Manufacturing; Textile Mills; and Computer & Electronic Products. The two industries reporting contraction in January are: Printing & Related Support Activities; and Petroleum & Coal Products.

What Respondents Are Saying

“Supplier factory capacity is well utilized. Increased demand, labor constraints and upstream supply delays are pushing lead times. This is more prevalent with international than U.S.-based suppliers.” (Computer & Electronic Products)

“Business remains strong. Manufacturing running at full capacity.” (Chemical Products)

“Very strong demand with limitations in supply to meet increased demand.” (Transportation Equipment)

“Labor continues to be one of our largest challenges.” (Food, Beverage & Tobacco Products)

“Our current business demand is going way past pre-COVID-19 [levels].” (Fabricated Metal Products)

“Business is very good. Customer inventories are low, with a significant order backlog through April. Supply base is struggling to keep up with demand, disrupting our production here and there. Raw material lead times have been extended. COVID-19 continues to cause challenges throughout the supply chain. Huge logistics challenges, especially in getting product through ports and in getting containers. We are seeing significant cost increases in logistics and raw materials.” (Machinery)

“We have had an increase in employees testing positive for COVID-19, negatively impacting manufacturing.” (Miscellaneous Manufacturing)

“2020 growth at 5 percent during a very challenging and volatile year. 2021 is expected to bring growth at a 7-percent or even greater pace. Logistics is the critical concern, but we are currently abating risk.” (Electrical Equipment, Appliances & Components)

“January 2021 started with strong orders for plastic components in auto, electrical and other sectors. The industry outlook is optimistic. Looking at investing in new equipment for anticipated demand later this year. Reshoring is taking hold, with new customer potential.” (Plastics & Rubber Products)

“Business is improving, but we are still struggling with a shortage of available labor.” (Primary Metals)

Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.

*Number of months moving in current direction.

Indexes reflect newly released seasonal adjustment factors.

Commodities Reported Up/Down In Price And In Short Supply 

Commodities Up in Price – Acrylonitrile Butadiene Styrene (ABS) Plastic; Aluminum (8); Ammonia; Brass Products (3); Calcium Carbonate; Copper (8); Corn; Corrugate (4); Corrugated Boxes (3); Crude Oil (2); Diesel; Electrical Components (2); Electronic Components (2); Ethylene; Freight (3); High-Density Polyethylene (HDPE); Isocyanates (2); Liquid-Crystal Display (LCD); Linear Low-Density Polyethylene (LLDPE) Resins; Lumber (7); Memory; Natural Gas; Nylon Fiber; Ocean Freight (2); Oil-Based Lubricants (2); Packaging Supplies (2); Paper Products (2); Personal Protective Equipment (PPE) — Gloves (2); Plastic Resins (5); Plating Services; Precious Metals; Propylene; Polypropylene (7); Polyols; Polyvinyl Chloride (4); Printed Circuit Boards; Soybean Products (4); Steel (6); Steel — Galvanized; Steel — High Carbon (2); Steel — Cold Rolled (5); Steel — Hot Rolled (5); Steel Products (5); Steel — Scrap (2); Steel — Stainless (3); Sulfuric Acid; and Wood — Pallets (2).

Commodities Down in Price – 
Caustic Soda.

Commodities in Short Supply
 – Copper; Corrugate; Corrugated Boxes (3); Electrical Components (4); Electronic Components (2); Freight — Road; Personal Protective Equipment (PPE) — Gloves (11); Semiconductors (2); Steel (2); Steel — Cold Rolled; Steel — Fabricated; and Steel — Hot Rolled (3).

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

January 2021 Manufacturing Index Summaries

Manufacturing PMI®

Manufacturing grew in January, as the Manufacturing PMI registered 58.7 percent, 1.8 percentage points lower than the seasonally adjusted December reading of 60.5 percent. “The Manufacturing PMI continued to indicate strong sector expansion and U.S. economic growth in January. All five contributing subindexes were in growth territory, but at lower rates compared to December. Of the six biggest manufacturing industries, five — Chemical Products; Fabricated Metal Products; Transportation Equipment; Food, Beverage & Tobacco Products; and Computer & Electronic Products — expanded. The New Orders and Production indexes continued to expand at strong levels. The Supplier Deliveries Index continued to reflect suppliers’ difficulties in maintaining delivery rates, due to factory labor-safety issues and transportation challenges. All 10 subindexes were positive for the period; a reading of ‘too low’ for Customers’ Inventories Index is considered a positive for future production,” says Fiore. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI above 43.1 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the January Manufacturing PMI indicates the overall economy grew in January for the eighth consecutive month following contractions in March, April, and May. “The past relationship between the Manufacturing PMI and the overall economy indicates that the Manufacturing PMI for December (58.7 percent) corresponds to a 4.4-percent increase in real gross domestic product (GDP) on an annualized basis,” Fiore said.

THE LAST 12 MONTHS

New Orders


ISM’s New Orders Index registered 61.1 percent in January, a decrease of 6.4 percentage points compared to the seasonally adjusted 67.5 percent reported in December. This indicates that new orders grew for the eighth consecutive month. “Five of the six largest manufacturing sectors —Transportation Equipment; Fabricated Metal Products; Chemical Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products — expanded. Petroleum & Coal Products retained its prior month level of growth,” says Fiore. A New Orders Index above 52.8 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

Of the 18 manufacturing industries, the 13 that reported growth in new orders in January — in the following order — are: Primary Metals; Electrical Equipment, Appliances & Components; Machinery; Plastics & Rubber Products; Transportation Equipment; Wood Products; Paper Products; Fabricated Metal Products; Chemical Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Furniture & Related Products; and Computer & Electronic Products. The two industries reporting a decline in new orders in January are: Printing & Related Support Activities; and Textile Mills.

Production

The Production Index registered 60.7 percent in January, 4 percentage points lower than the seasonally adjusted December reading of 64.7 percent, indicating growth for the eighth consecutive month. “Five (Chemical Products; Transportation Equipment; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products) of the top six industries expanded at moderate to strong levels,” says Fiore. An index above 52.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

The 12 industries reporting growth in production during the month of January — listed in order — are: Machinery; Primary Metals; Wood Products; Electrical Equipment, Appliances & Components; Chemical Products; Transportation Equipment; Fabricated Metal Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Paper Products; and Computer & Electronic Products. The two industries reporting decreased production in January are: Printing & Related Support Activities; and Textile Mills.

Employment

ISM’s Employment Index registered 52.6 percent in January, 0.9 percentage point higher than the seasonally adjusted December reading of 51.7 percent. “The Employment Index grew for the second month in a row with only one (Chemical Products) of the six big industry sectors expanding. Continued strong new-order levels, low customer inventories and an expanding backlog indicate potential employment strength for the rest of the first quarter. For the fifth straight month, survey panelists’ comments indicate that significantly more companies are hiring or attempting to hire than those reducing labor forces,” says Fiore. An Employment Index above 50.6 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, the six industries to report employment growth in January — in the following order — are: Electrical Equipment, Appliances & Components; Wood Products; Primary Metals; Machinery; Nonmetallic Mineral Products; and Chemical Products. The seven industries reporting a decrease in employment in January — listed in the following order — are: Printing & Related Support Activities; Paper Products; Textile Mills; Petroleum & Coal Products; Plastics & Rubber Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products.

Supplier Deliveries†


The delivery performance of suppliers to manufacturing organizations was slower in January, as the Supplier Deliveries Index registered 68.2 percent. This is 0.5 percentage point higher than the 67.7 percent reported in December. “Suppliers continue to struggle to deliver, with deliveries slowing at a faster rate compared to the previous month. Transportation challenges and challenges in supplier-labor markets are still constraining production growth — and to a greater extent compared to December. The Supplier Deliveries Index reflects the difficulties suppliers continue to experience due to COVID-19 impacts combined with strong growth in economic activity. Since stable manufacturing began in August 2020, the index has gone up every month, indicating that suppliers are experiencing greater difficulties in meeting factory needs. Supplier labor and transportation constraints are not expected to diminish in the near-to-moderate term due to COVID-19 impacts,” says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

Seventeen industries reported slower supplier deliveries in January, listed in the following order: Apparel, Leather & Allied Products; Paper Products; Textile Mills; Nonmetallic Mineral Products; Fabricated Metal Products; Plastics & Rubber Products; Machinery; Food, Beverage & Tobacco Products; Chemical Products; Transportation Equipment; Furniture & Related Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Miscellaneous Manufacturing; Petroleum & Coal Products; and Primary Metals. No industries reported faster supplier deliveries in January.

*Supplier Deliveries is no longer seasonally adjusted; however, due to more precise rounding, this number increased by 0.1 percentage point.

Inventories

The Inventories Index registered 50.8 percent in January, 0.2 percentage point lower than the seasonally adjusted 51 percent reported for December. Inventories grew for a fourth consecutive month after three months of contraction. “Inventory growth stability in light of ongoing supplier constraints indicates that supply chains are meeting near-term production demand, despite transportation and COVID-19 headwinds. However, delivery rates are not strong enough to grow inventory, as many panelists would prefer,” says Fiore. An Inventories Index greater than 44.5 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 seven industries reporting higher inventories in January — listed in order — are: Textile Mills; Furniture & Related Products; Chemical Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Machinery; and Transportation Equipment. The four industries reporting a decrease in inventories in January are: Petroleum & Coal Products; Computer & Electronic Products; Miscellaneous Manufacturing; and Fabricated Metal Products. Seven industries reported no change in January compared to December.

Customers’ Inventories†

ISM’s Customers’ Inventories Index registered 33.1 percent in January, 4.8 percentage points lower than the 37.9 percent reported for December, indicating that customers’ inventory levels were considered too low. “Customers’ inventories are too low for the 54th consecutive month, a positive for future production growth. This is the lowest reading since December 2009 (32.5 percent), and for six months in a row, the Customers’ Inventories Index has been at its lowest levels since December 2009-June 2010, when it averaged 35.2 percent,” says Fiore.

Of the 18 industries, the only one reporting higher customers’ inventories in January is Printing & Related Support Activities. The 14 industries reporting customers’ inventories as too low during January — listed in order — are: Wood Products; Nonmetallic Mineral Products; Primary Metals; Machinery; Transportation Equipment; Furniture & Related Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Paper Products; Chemical Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; and Miscellaneous Manufacturing.

Prices†

The ISM Prices Index registered 82.1 percent, an increase of 4.5 percentage points compared to the December reading of 77.6 percent, indicating raw materials prices increased for the eighth consecutive month. This is the highest reading since April 2011, when the index registered 82.6 percent. “Aluminum, brass, copper, chemicals, steel, soy and corn products, petroleum-based products including plastics, transportation costs, electrical and electronic components, corrugate, wood and lumber products all continued to record price increases,” says Fiore. A Prices Index above 52.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

All 18 industries reported paying increased prices for raw materials in January, in the following order: Apparel, Leather & Allied Products; Paper Products; Wood Products; Fabricated Metal Products; Furniture & Related Products; Plastics & Rubber Products; Primary Metals; Electrical Equipment, Appliances & Components; Machinery; Textile Mills; Nonmetallic Mineral Products; Chemical Products; Petroleum & Coal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Transportation Equipment; Food, Beverage & Tobacco Products; and Printing & Related Support Activities.

Backlog of Orders†


ISM’s Backlog of Orders Index registered 59.7 percent in January, a 0.6-percentage point increase compared to the 59.1 percent reported in December, indicating order backlogs expanded for the seventh consecutive month. “Backlogs expanded at slightly faster rates in January, indicating that new-order intakes more than fully offset production outputs for the ninth straight month. Four (Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; and Chemical Products) of the six big industry sectors’ backlogs expanded with significant strength. Backlogs achieved their highest expansion levels since June 2018, when the index registered 60.1 percent,” says Fiore.

The 12 industries reporting growth in order backlogs in January, in the following order, are: Transportation Equipment; Primary Metals; Wood Products; Paper Products; Electrical Equipment, Appliances & Components; Machinery; Fabricated Metal Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Computer & Electronic Products; Chemical Products; and Plastics & Rubber Products. In January, two industries reported lower backlogs: Textile Mills; and Furniture & Related Products.

New Export Orders†


ISM’s New Export Orders Index registered 54.9 percent in January, a decrease of 2.6 percentage points compared to the December reading of 57.5 percent. “The New Export Orders Index grew for the seventh consecutive month, but at a slower rate. Five (Fabricated Metal Products; Transportation Equipment; Computer & Electronic Products; Chemical Products; and Food, Beverage & Tobacco Products) of the six big industry sectors expanded. New export orders were again a positive factor to the growth in new-order levels, with many panelists suggesting U.S. dollar strength was a contributor to export orders,” says Fiore.

The 10 industries reporting growth in new export orders in January — in the following order — are: Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Machinery; Electrical Equipment, Appliances & Components; Transportation Equipment; Computer & Electronic Products; Chemical Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The only industry reporting a decrease in new export orders is Paper Products. Seven industries reported no change in exports in January.

Imports†

ISM’s Imports Index registered 56.8 percent in January, an increase of 2.2 percentage points compared to the 54.6 percent reported for December. “Imports expanded for the seventh consecutive month, at stronger rates compared to December, reflecting continued increases in U.S. factory demand and interest in increasing on-shore inventory. Panelists continued to note record-breaking backlogs in ports of entry, as well as difficulty in arranging drayage and operating within the domestic transportation market,” says Fiore.

The 11 industries reporting growth in imports in January — in the following order — are: Wood Products; Primary Metals; Textile Mills; Machinery; Transportation Equipment; Nonmetallic Mineral Products; Fabricated Metal Products; Chemical Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Electrical Equipment, Appliances & Components. Two industries reported a decrease in imports in January: Printing & Related Support Activities; and Paper Products.

†The Supplier Deliveries, Customers’ Inventories, Prices, Backlog of Orders, New Export Orders and Imports indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy

Average commitment lead time for Capital Expenditures increased in January by nine days to 141 days. Average lead time for Production Materials decreased in January by one day to 68 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased in January by two days to 39 days.

Posted: February 1, 2021

Source: Institute for Supply Management

ALEXANDRIA, Va. — January 29, 2021 — Mission Linen Supply — a family-owned company that has provided products and services to hospitality, healthcare and industrial businesses for more than 90 years — has recently achieved the Hygienically Clean certification for Healthcare for its Chico, Calif., location. Headquartered in Santa Barbara, Calif., the company employs more than 2,500 people in five western states. The Chico location joins Mission’s Sacramento location in holding the Hygienically Clean certification. Hygienically Clean is the quantified, validated standard and measure for hygienically clean textiles in North America since 2011, and achieving this certification reflects its commitment to best management practices (BMPs) in laundering as verified by on-site inspection and its capability to produce hygienically clean textiles as quantified by ongoing microbial testing based on established hygienically clean healthcare textile methods and standards.

The Hygienically Clean Healthcare certification confirms this organization’s continuing dedication to infection prevention, compliance with recognized industry standards and processing healthcare textiles using BMPs as described in its quality assurance documentation, a focal point for Hygienically Clean inspectors’ evaluation. The independent, third-party inspection must also confirm essential evidence that:

• Employees are properly trained and protected;
• Managers understand regulatory requirements;
• OSHA-compliant; and
• Physical plant operates effectively.

To achieve certification initially, laundries pass three rounds of outcome-based microbial testing, indicating that their processes are producing Hygienically Clean Healthcare textiles and diminished presence of yeast, mold and harmful bacteria. They also must pass a facility inspection. To maintain their certification, they must pass quarterly RODAC and semi-annual USP 62 testing (RODAC results less than or equal to 20 cfu per square diameter and USP 62 results must show an absence of specified microorganisms) to ensure that as laundry conditions change, such as water quality, textile fabric composition and wash chemistry, laundered product quality is consistently maintained. Re-inspection occurs every two to three years.

This process eliminates subjectivity by focusing on outcomes and results that verify textiles cleaned in these facilities meet appropriate hygienically clean standards and BMPs for hospitals, surgery centers, medical offices, nursing homes and other medical facilities.

Hygienically Clean Healthcare certification acknowledges laundries’ effectiveness in protecting healthcare operations by verifying quality control procedures in linen, uniform and facility services operations related to the handling of textiles containing blood and other potentially infectious materials.

Certified laundries use processes, chemicals and BMPs acknowledged by the federal Centers for Disease Control and Prevention (CDC), Centers for Medicare and Medicaid Services, Association for the Advancement of Medical Instrumentation, American National Standards Institute and others. Introduced by TRSA in 2012, Hygienically Clean Healthcare brought to North America the international cleanliness standards for Hygienically Clean healthcare linens and garments used worldwide by the Certification Association for Professional Textile Services and the European Committee for Standardization

Objective experts in epidemiology, infection control, nursing and other healthcare professions work with Hygienically Clean launderers to ensure the certification continues to enforce the highest standards for producing clean healthcare textiles.

“Congratulations to Mission Linen Supply on their most recent certification,” said Joseph Ricci, TRSA president and CEO. “This achievement proves their commitment to infection prevention and that their laundries take every step possible to prevent human illness.”

Hygienically Clean reflects the evolution of healthcare laundry certification in light of growing global concerns about infection control, documenting practices that ensure elimination of potentially harmful microbial content while adding quantifiable verification of continuous improvement in overall cleanliness.

Posted January 29, 2021

Source: TRSA