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Released September 07, 2023 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. manufacturing activity contracted for the 10th straight month in August, but the rate of decline continued to slow, according to a survey report by the Institute for Supply Management (ISM). Timothy Fiore, chair of the ISM's Manufacturing Business Survey Committee, noted improving conditions for U.S. manufacturing. Industrial Info is tracking more than $80 billion worth of U.S. Industrial Manufacturing Industry projects that are expected to kick off in the fourth quarter.
The ISM's August Purchasing Managers Index (PMI), which tracks 18 industry sectors in the U.S., registered 47.6%--up from 46.4% in July and 46% in June--although this marks the 10th straight month of contraction. Any reading under 50% indicates a contraction in the manufacturing economy. The Purchasing Manager's Index is part of the ISM's monthly Report on Business.
Fiore noted the New Orders Index dipped, but said the Production Index reached 50%, up from 48.3% in July, and the Backlog of Orders Index registered 44.1%--up from 42.8% the month prior.
He also noted the Supplier Deliveries Index registered 48.6%--the highest reading in the past 11 months. Anything above 50% indicates slower deliveries, which is typical as the economy improves and customer demand increases, according to the ISM's press release.
"The U.S. manufacturing sector shrank again, but the uptick in the PMI indicates a slower rate of contraction," Fiore said. "The August composite index reading reflects companies managing outputs appropriately as order softness continues, but the month-over-month increase is a sign of improvement."
"Panelists' companies stabilized production compared to July and continued to manage head counts, primarily through attrition. Inputs--defined as supplier deliveries, inventories, prices and imports--continued to accommodate future demand growth."
The survey respondents offered a mixed outlook, often depending on the PMI's respective manufacturing industries: One from Fabricated Metal Products noted "fourth-quarter orders falling short of projection and indicating a slowdown in customer demand, though the first-quarter forecast remains solid. Unclear if this is an inventory correction. Logistics stabilized and costs are matching 2019. Shortages limited to only a few items now, but suppliers are hesitant to add or replace labor needed in light of slowing demand."
Meanwhile, a respondent from Plastics & Rubber Products noted: "Business is beginning to improve moderately. Still well below 2022 levels, but it appears that the 'great inventory rebalancing' is finally coming to fruition."
Despite any red flags, Industrial Info's project activity in the U.S. Industrial Manufacturing Industry remains robust. Of the more than $80 billion in projects expected to kick off in the fourth quarter, two sectors account for about half of the spend: transportation systems ($25.1 billion) and semiconductors & computers ($17.2 billion). The data center ($14.4 billion), automotive ($9.4 billion) and heavy manufacturing ($6.9 billion) sectors round out the top five.
Micron Technology Incorporated's (NASDAQ:MU) (Boise, Idaho) $15 billion expansion of its Boise Fab 4 Memory and Semiconductors Campus in Boise, Idaho, involves construction of a 92,000-square-foot fabrication building to expand wafer production, and other buildings, plus new production lines and fabrication equipment, to produce semiconductor memory chips for the automotive industry, data centers and mobile devices. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here to read a detailed project report.
Brightline Trains LLC (Miami, Florida) aims to break ground on its proposed $12 billion, two-phase high-speed rail line connecting Las Vegas and Southern California in December. The 218-mile system would run from Victorville, California, northwest of Los Angeles, adjacent to U.S. Interstate 15, to Las Vegas--with trains capable of reaching 200 miles per hour. Click here for the project report.
Brightline estimates that the fully electric and emission-free rail system will take 3 million cars off the road each year, equal to about 400,000 tons of carbon dioxide.
Last month, U.S. Senator Jacky Rosen (D-Nevada) held a press conference to call on the U.S. Department of Transportation to approve the state's application for federal funding to construct the project. A related press release noted she sent a letter to Secretary of Transportation Pete Buttigieg on the project's progress, including approval from the Clark County Commission and completion of the environmental review process.
Another major transportation-related project expected to kick off in the fourth quarter is a proposed $12 billion expansion at the Chicago O'Hare International Airport. The project entails constructing a new, 300,000-square-foot global terminal with 10 new gates, to replace a 55-year terminal, as well as adding three new concourses. Subscribers can read more information in Industrial Info's project report.
Subscribers can click here for a full list of U.S. Industrial Manufacturing Industry projects planned to kick off in the fourth quarter.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
The ISM's August Purchasing Managers Index (PMI), which tracks 18 industry sectors in the U.S., registered 47.6%--up from 46.4% in July and 46% in June--although this marks the 10th straight month of contraction. Any reading under 50% indicates a contraction in the manufacturing economy. The Purchasing Manager's Index is part of the ISM's monthly Report on Business.
Fiore noted the New Orders Index dipped, but said the Production Index reached 50%, up from 48.3% in July, and the Backlog of Orders Index registered 44.1%--up from 42.8% the month prior.
He also noted the Supplier Deliveries Index registered 48.6%--the highest reading in the past 11 months. Anything above 50% indicates slower deliveries, which is typical as the economy improves and customer demand increases, according to the ISM's press release.
"The U.S. manufacturing sector shrank again, but the uptick in the PMI indicates a slower rate of contraction," Fiore said. "The August composite index reading reflects companies managing outputs appropriately as order softness continues, but the month-over-month increase is a sign of improvement."
"Panelists' companies stabilized production compared to July and continued to manage head counts, primarily through attrition. Inputs--defined as supplier deliveries, inventories, prices and imports--continued to accommodate future demand growth."
The survey respondents offered a mixed outlook, often depending on the PMI's respective manufacturing industries: One from Fabricated Metal Products noted "fourth-quarter orders falling short of projection and indicating a slowdown in customer demand, though the first-quarter forecast remains solid. Unclear if this is an inventory correction. Logistics stabilized and costs are matching 2019. Shortages limited to only a few items now, but suppliers are hesitant to add or replace labor needed in light of slowing demand."
Meanwhile, a respondent from Plastics & Rubber Products noted: "Business is beginning to improve moderately. Still well below 2022 levels, but it appears that the 'great inventory rebalancing' is finally coming to fruition."
Despite any red flags, Industrial Info's project activity in the U.S. Industrial Manufacturing Industry remains robust. Of the more than $80 billion in projects expected to kick off in the fourth quarter, two sectors account for about half of the spend: transportation systems ($25.1 billion) and semiconductors & computers ($17.2 billion). The data center ($14.4 billion), automotive ($9.4 billion) and heavy manufacturing ($6.9 billion) sectors round out the top five.
Micron Technology Incorporated's (NASDAQ:MU) (Boise, Idaho) $15 billion expansion of its Boise Fab 4 Memory and Semiconductors Campus in Boise, Idaho, involves construction of a 92,000-square-foot fabrication building to expand wafer production, and other buildings, plus new production lines and fabrication equipment, to produce semiconductor memory chips for the automotive industry, data centers and mobile devices. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here to read a detailed project report.
Brightline Trains LLC (Miami, Florida) aims to break ground on its proposed $12 billion, two-phase high-speed rail line connecting Las Vegas and Southern California in December. The 218-mile system would run from Victorville, California, northwest of Los Angeles, adjacent to U.S. Interstate 15, to Las Vegas--with trains capable of reaching 200 miles per hour. Click here for the project report.
Brightline estimates that the fully electric and emission-free rail system will take 3 million cars off the road each year, equal to about 400,000 tons of carbon dioxide.
Last month, U.S. Senator Jacky Rosen (D-Nevada) held a press conference to call on the U.S. Department of Transportation to approve the state's application for federal funding to construct the project. A related press release noted she sent a letter to Secretary of Transportation Pete Buttigieg on the project's progress, including approval from the Clark County Commission and completion of the environmental review process.
Another major transportation-related project expected to kick off in the fourth quarter is a proposed $12 billion expansion at the Chicago O'Hare International Airport. The project entails constructing a new, 300,000-square-foot global terminal with 10 new gates, to replace a 55-year terminal, as well as adding three new concourses. Subscribers can read more information in Industrial Info's project report.
Subscribers can click here for a full list of U.S. Industrial Manufacturing Industry projects planned to kick off in the fourth quarter.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
