Electrical Marketing’s Leading Indicators

Dec. 18, 2009
Purchasing Manager Index (PMI) slips in October. Although it still remains in positive territory and indicates that purchasing managers are optimistic about where the economy is headed

Purchasing Manager Index (PMI) slips in October. Although it still remains in positive territory and indicates that purchasing managers are optimistic about where the economy is headed, the PMI slipped 2.1 points to 53.6 points in November. Any reading over 50 points is still good news.

Said Norbert Ore, chair of the Manufacturing Business Survey Committee for the Tempe, Ariz.-based Institute for Supply Management, “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.”

Building permits up 6% in November. The U.S. Census Bureau said building permits in November were at a seasonally adjusted annual rate of 584,000, six percent above the revised October rate of 551,000 but 7.3 percent below the November 2008 estimate of 630,000. Single-family authorizations in November were up 5.3 percent to a rate of 473,000, compared to the revised October figure of 449,000.

Conference Board’s Employment Trends Index (ETI) improves again. The ETI increased for the fourth consecutive month and now stands at 90.8, up 1.8 percent from the revised October figure. The index is down 9.4 percent from a year ago.

“The very small number of job losses in November was to be expected given the increase in the Employment Trends Index in recent months, and this month’s large increase in the ETI suggests that job gains are imminent,” said Gad Levanon, associate director, Macroeconomic Research at the Conference Board. “However, the pace of hiring is likely to remain subdued because the economic recovery is expected to be weak throughout the first half of 2010.”

This month’s increase in the ETI was driven by improvement in initial claims for unemployment insurance, number of temporary employees, job openings, industrial production and real manufacturing and trade sales.